Pound gains and more stimulus packages announced
Monday 30 March, 2020
Daily Currency UpdateGBP - British PoundAs Covid 19 continues to grip currency markets and cause further stimulus measures around the globe, the Pound managed to gain at the back end of last week. Cable had witnessed its weakest level since 1985 and last week posted its best weekly performance in over a decade. The pair broke through the 1.24 handle on Friday and opens this morning just shy of this in the 1.23 range. Large parts of cable's gains have mainly come down to Dollar weakness following the record high release of US unemployment claims last week. Whilst the spread of the virus is extremely shocking and worrying a big surprise on Friday was the announcement the British PM has contracted the virus. Now in self-isolation and continuing to chair the UK’s response team from home, it was a warning to us all that we must take the Government's advise and stay at home. England's Health Secretary Matt Hancock said he had also tested positive while England's Chief Medical Officer, Prof Chris Whitty, has shown symptoms. The UK death toll jumped significantly to 1,228 on Sunday, including two NHS doctors. Yesterday the deputy chief medical officer warned that it could be 6 months before the UK returns to normal. Dr Jenny Harries said the number of cases will rise in the next few weeks and suggested some form of lock down will remain in place for half a year.Economic data this week for the UK will be an interesting one to watch. We will see the release of the Manufacturing and Services PMI’s, both are expected to show a drop and could cause a drop in the value of the Pound depending on how deep we slip into contraction territory.
Key Moversonomic data this week for the UK will be an interesting one to watch. We will see the release of the Manufacturing and Services PMIs, both are expected to show a drop and could cause a drop in the value of the Pound depending on how deep we slip into contraction territory. With the US poised to become the new epicentre of the Virus, Trump made a U-turn following his comments last week. Whilst perhaps trying to inject some hope into the American people he was quite adamant things will return to normal by Easter but has since extended the social distancing guidelines until April 30. The U.S. House of Representatives on Friday approved a $2.2 trillion aid package, the largest in American history, to help people and businesses cope with the economic downturn inflicted by the coronavirus (Covid19) outbreak. The United States now has 85,594 people counted as infected, up from 68,211 on Friday.On the data front in the US this week we will start on Monday with Pending Home Sales for the month of February. On Tuesday we will see the release of US Consumer Confidence. Finally on Friday all eyes will be on the US Unemployment Rate decision.Overnight Australia has approved a 130 Billion Dollar stimulus package to try and safeguard jobs but even with this injection there was still a worrying warning pinned to this. Its expected the spread of the virus could push firms and households to the brink and possibly push Australia’s economy into a deep recession.
- GBP/USD: 1.2300 - 1.2450 ▲
- GBP/EUR: 1.1110 - 1.1250 ▲
- GBP/NZD: 2.0400 - 2.0680 ▲