Home Daily Commentaries Crude oil hits rock bottom

Crude oil hits rock bottom

Daily Currency Update

GBP - British PoundThe pound remained fairly muted through yesterday's trading as the UK lockdown continues to deter economic stimulus. There were 496 recorded British deaths on Monday, a dip relative to recent weeks, however expected after the weekend ‘lag’. Many are still criticising the government’s grip on the situation as reports claim there has been a delay in the importing of PPE from Turkey. In high infected regions, there is a worry that essential workers will go without the protective equipment required to safely work on the front line. Investors continue to overlook the pound for safer bets and therefore at present, it doesn’t have the fuel to soar again. It will require a more optimistic stance from institutions before the pound is once again considered as a risk worth taking. The UK can however take solace in the jobless claims figure released this morning. It was forecasted that 170K would claim unemployment, however the real figure lies closer to 12K. Unfortunately, this data is considered 'laggy' as the next reading is expected to blow this figure out of the water.

Key Movers

The main story on Monday was the crash in crude oil prices, as individuals offload positions for cheap to avoid storage issues. The crash sent oil prices into negative, as many investors deem their oil position a burden and pay to offload. The US Dollar benefited from the crash as investors rush to safe haven positions, in order to stabilise the rocking ship. 2020 has been an extremely interesting year for oil so far as the Saudi-Russia stand-off and the coronavirus crisis have caused mayhem to the supply-demand harmony. Both NOK and CAD had the wind knocked out of them, as they are positively correlated with oil prices, whilst SEK also performed badly on the back of global economic uncertainty. Much like sterling, the Euro has remained fairly muted for a few weeks, as investors wait to understand the full effect of the pandemic in the Eurozone. With some of the most affected nations on earth, the Eurozone’s revised 2020-2021 economic outlook doesn’t make pretty reading. Italy, Germany, France and Spain all are expecting a suppression in output moving forward, especially considering the financial trouble they began the crisis in.

Expected Ranges

  • GBP/USD: 1.23 - 1.2510 ▲
  • GBP/EUR: 1.1310 - 1.1520 ▼
  • GBP/AUD: 1.95 - 1.9715 ▲