The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
As the unemployment rate picked up from 6.9% to 7% at the start of the fourth quarter, this limited confidence in the underlying health of the Australian economy.
However, growth in Australia’s manufacturing and service sector PMIs helped support the ‘Aussie’ at the start of the week.
Meanwhile, an unexpectedly sharp rebound in the third quarter New Zealand retail sales figure supported the New Zealand dollar.
In addition, as the AstraZeneca Covid-19 vaccine delivered a 90% efficacy in late-stage trials, a renewed sense of market optimism saw both risk-sensitive currencies pushing higher at the start of the new week.
Meanwhile, the New Zealand Dollar is continuing to make gains on Tuesday following the news that the Reserve Bank of New Zealand’s (RBNZ) remit may change and add house prices to its mandate while deciding monetary policy.
Support for the New Zealand dollar could falter on Wednesday, however, if October’s NZ trade data shows a widened deficit as anticipated.
Signs of deteriorating trade conditions may weigh on NZD exchange rates, highlighting the economy’s continued exposure to global Covid-19 disruption.
Any deterioration in market sentiment could also see the Australian dollar return to the back foot, given the coronavirus cases in the US and Europe remain high.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)