Daily Currency Update

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Dollar higher as Covid -19 cases climb

GBP - British Pound

There is a general risk off mood in the markets this morning as Coronavirus cases around the world steadily increase. In the UK the number of fatalities continues to fall but faces a test as more and more restaurants/pubs begin to open their doors after restrictions were relaxed at the weekend. 16 people were reported to have died from official government figures released on Monday however we will likely see an increase today because of the way the weekend's data is collated. The government will hope these figures continue to move lower so more and more UK business can reopen and the economy can fight back from what is likely to be its deepest recession of modern times.

Yesterday's one set of data of note was the UK Construction PMI which beat estimates coming in at 55.3. The rest of the week is relatively quiet on the data-front so most attention will likely be drawn to UK Chancellor Rishi Sunak's summer statement in parliament tomorrow which is due to unveil how the government plans to support sectors such as the arts with loans and grants to the tune of £1.6b expected. The phasing out of the furlough scheme will also likely draw attention as the government tries to encourage business to bring staff back to work. GBP/EUR trades at 1.1050.

Key Movers

Stock markets around the world have given up yesterday's gains overnight as Coranvirus continues to cause concern. The US is close to nearly 3 million positive tests with over 130k deaths as cases continue to rise in southern states such as Florida, Arizona and Texas. In Australia, lockdown has been reimposed in Melbourne after a recent spike in infections. In Japan, there has been a recent rise in cases in Tokyo and India has overtaken Russia to third in the world for confirmed cases behind only the States and Brazil. As it appears the situation is slowly coming under control in most of Europe. The focus now appears to be on countries further afield. Yesterdays one set of data of note was the US ISM Non-Manufacturing PMI for June which posted a very strong 57.1 when 50 was expected. This buoyed equity markets, however as mentioned, these gains have now been erased.

After making a play for 0.70, AUD/USD is lower on the announcement of the lockdown in Melbourne and with little top tier data this week to analyse it seems the spread of the virus will dictate currency moves with USD likely to gain should sentiment remain negative. Indeed, the euro which has shown strength of late has slipped a little this morning with EUR/USD back under 1.13 due to risk aversion. The move lower for the euro was likely given some extra impetus by German Industrial Production figures falling short of expectations this morning showing a 7.8% gain when 11% was the median forecast.

EUR/USD currently trades at 1.1285 with USD/JPY at 107.60

Expected Ranges

GBP/USD: 1.24 - 1.2520 ▼

GBP/EUR: 1.0990 - 1.1120 ▼

GBP/AUD: 1.79 - 1.8070 ▲

GBP/NZD: 1.9020 - 1.9180 ▲

GBP/CAD: 1.6880 - 1.7030 ▲