Foremost Currency Group

Make the most of your currency

Talk to our friendly team:+44 (0)1442 892060

Pound Struggles, UK Economy Expected to Shrink by -7%

Pound News: UK on Course to Shrink by 7%

Sterling was able to make gains on Tuesday as risk sentiment amongst investors improved after governments began to ease lockdowns across the world.

However, PMI data revealed the country is on course for an unprecedented -7% contraction this quarter as lockdown measures forced closures across the country. Britain’s services sector PMI slumped from March’s lacklustre 34.5 to a dismal 13.4 in April.

Looking ahead, traders are going to be eagerly awaiting the Bank of England’s (BoE) monetary policy meeting on Thursday. Sterling is likely to remain under pressure ahead of the meeting and minutes.

Pound Euro News: Bundesbank Must Stop Buying Bonds from the ECB

The Pound made gains against the Euro on Tuesday after Germany’s top court ruled the country’s central bank, the Bundesbank must stop buying bonds under the European Central Bank’s (ECB) stimulus scheme unless the ECB can justify the purchases.

According to chief Europe economist at Standard Chartered, Sarah Hewin:

‘The good news is that the ruling does not seem to apply to the PEPP, but there is a bigger concern that it limits the ability of the ECB to ‘do whatever it takes’.’

Looking ahead the single currency could extend its losses against the Pound following the release of Germany’s services PMI. If the bloc’s largest economy sees its service sector activity plunge further into contraction, the Euro will slump.

Pound US Dollar News: USD Slumps as Risk Appetite Improves

The US Dollar suffered losses against the Pound today as demand for the safe-haven ‘Greenback’ fell. This allowed GBP/USD to recover around 1.5% of its losses this month.

Risk appetite improved after US officials said Washington was not looking to take punitive measures against Beijing despite President Donald Trump stepping up his verbal attacks against the country.

Looking ahead, if risk appetite continues to rise as further countries and US states announce plans to lift lockdowns, the safe-haven Dollar will continue to edge lower.

Pound Canadian Dollar News: Rising Oil Prices Buoy the ‘Loonie’

The Canadian Dollar was able to make gains against the Pound on Tuesday as oil prices jumped on hopes for increased demand.

The oil-sensitive ‘Loonie’ benefitted today as some US states and countries in Europe and Asia began to ease coronavirus lockdowns. Added to this, in a note, RBC Capital Markets research stated that vehicle traffic in most US jurisdictions has rebounded. This includes areas that have yet to lift shelter-in-place orders, increasing expectations oil demand will increase.

Looking ahead, if oil prices continue to improve as further countries and US states relax coronavirus restrictions, the Canadian Dollar will edge higher.

Pound Australian Dollar News: RBA Leaves Interest Rates at Record Lows

The Pound Australian Dollar exchange rate slumped on Tuesday, as hopes that Australia and New Zealand would soon open their economies to each other after getting the coronavirus crisis under control.

Meanwhile, the Reserve Bank of Australia (RBA) left interest rates at a record low. However, RBA Governor Philip Lowe said he hopes of stronger economic recovery if there is ‘further substantial progress in containing the coronavirus in the near term and there is a faster return to normal economic activity.’

Looking ahead, if risk appetite continues to improve on further signs Australia and New Zealand will open their economies to each other, the ‘Aussie’ will rise.

© Copyright 2013 to 2020 | Foremost Currency Group Ltd | All rights reserved