Pound (GBP) Rallies as UK Lockdown Comes into Effect on Hopes New Lockdown Measures Will Help to Curb Coronavirus
The Pound (GBP) rocketed higher yesterday as markets welcomed the introduction of the UK’s stricter quarantine measures. It’s hoped the new measures will help accelerate the containment of the disease.
This saw Sterling surge in spite of the UK’s latest PMI figures showing the UK’s private sector has already been hit hard by coronavirus disruption.
Meanwhile, the release of the UK’s latest CPI figures earlier this morning are offering further support to the Pound as inflation printed in line with expectations last month.
Euro (EUR) Shrugs off Abysmal PMI Figures
The Euro (EUR) ticked higher on Tuesday in spite of the Eurozone’s preliminary PMI figures revealing business growth in the bloc plummeted to a new record low this month as widespread lockdowns brought activity to a screeching halt.
While the figures made for some worrying reading and point to the Eurozone economy shrinking 2% in the first quarter, the plunge in private sector growth was largely anticipated, allowing the Euro to tick higher as Italy continued to report a fall in the number of new cases.
Looking ahead, any further upside in the Euro will likely be tied to the Eurozone’s coronavirus crisis, with the single currency potentially finding some support if there are signs the bloc is starting to get a grip on the outbreak.
US Dollar (USD) Plunges as Liquidity Concerns Evaporate
The US Dollar (USD) fell sharply during yesterday’s trading session in response to easing fears over a possible USD shortage after measures taken by central banks to improve liquidity.
Further weighing on the US Dollar was a warning from the World Health Organisation (WHO) that the US is at risk at becoming the new epicentre of the coronavirus outbreak following a sharp rise in cases this week.
As long as market sentiment continues improving we may see the US Dollar relinquish ground today, especially if a contraction in US durable goods orders is shown to have deepened last month.
Canadian Dollar (CAD) Weakens as Oil Fails to Maintain Gains
The Canadian Dollar (CAD) trended lower on Tuesday, with the oil-sensitive currency undermined as an early rise in crude prices was quickly trimmed.
Australian Dollar (AUD) Surges on Improved Market Sentiment
The Australian Dollar (AUD) roared higher overnight on Tuesday, rallying on the back of improved risk sentiment after the US Senate finally reached an agreement on a massive coronavirus stimulus package.
New Zealand Dollar (NZD) Mixed as NZ Declares Emergency
The New Zealand Dollar (NZD) fluctuated overnight, initially falling after New Zealand declared of a state of national emergency over the coronavirus, before rallying as market sentiment began to improve.