Pound’s (GBP) Recovery Proves Short Lived
The Pound (GBP) roared higher through the European session on Friday, surging in anticipation of further stimulus measures from the UK government.
While Chancellor Rishi Sunak unveiled a bold plan, which would involve the government paying up to 80% of private sector wages, Sterling was unable to sustain its gains, as Boris Johnson also announced further restrictions to economic activity.
Coming up this week, the publication of the UK’s preliminary PMI figures for March will provide GBP investors with their first indication of how the UK economy is holding up amidst the coronavirus crisis.
Euro (EUR) Struggles as Eurozone Governments Fail to Coordinate Stimulus Plans
The Euro (EUR) stumbled at the end of last week’s session as markets expressed concern that while EU governments have announced stimulus packages of their own, their appears to be no coordinated effort to develop a plan for the entire bloc.
With EUR investors growing increasingly nervous about the state of the Eurozone economy they are looking to EU leaders to work together on a comprehensive plan.
Turning to the week ahead, the publication of the Eurozone’s own PMI figures are expected to reveal a dramatic contraction in the private sector this month as a result of stringent quarantine measures. Expect this to weigh heavily on the Euro.
US Dollar (USD) Eases from Recent Highs
After rocketing higher throughout much of the week US Dollar (USD) took a breather on Friday as concerns over liquidity faded and USD investors took the opportunity to engage in a bit of profit taking.
Further limiting the appeal of the US Dollar was the delay to a trillion Dollar spending plan, as Democrats and Republicans continue to argue over its contents.
Looking ahead, it seems likely that the US Dollar will stage a comeback this week as the ongoing uncertainty regarding the coronavirus leaves plenty of demand for safe-have currencies.
Canadian Dollar (CAD) Buoyed as Trump Signals Plans to Increase US Oil Stockpiles
The Canadian Dollar (CAD) rallied at the end of last week’s session on the back Donald Trump’s plan to purchase up to $3bn of US oil, to hold in the nation’s strategic reserves and prop up oil prices by reducing the global supply glut.
Australian Dollar (AUD) Weakens on Australian Lockdown Announcement
After ticking higher on Friday, the Australian Dollar (AUD) opened this week on the back foot, sliding in response to the announcement that Australia will be shutting all non-essential services to help stop the spread of the coronavirus.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) is also off to a poor start this week, sliding through overnight trade as the ongoing panic surrounding the coronavirus, saw investors shun the risk-sensitive currency.