Pound (GBP) Slumps on Gloomy Economic Outlook
The Pound (GBP) fell sharply yesterday after Bank of England (BoE) chief economist Andy Haldane warned of a likely contraction of GDP in the first quarter and indicated that the post-coronavirus rebound may prove slow.
In a podcast released on Tuesday, Haldane asserted ‘people might be reluctant to spend too vigorously’ once the coronavirus lockdown is lifted.
This overshadowed the publication of the UK’s latest jobs report, which revealed a far more modest rise in unemployment claims last month than analysts had feared.
Meanwhile, the UK’s consumer price index is unlikely to offer much support to Sterling this morning as inflation slowed as expected last month.
Euro (EUR) Supported by Positive ZEW Surveys
Trade in the Euro (EUR) was robust on Tuesday in response as surprise rebound in German investor confidence this month.
According to the latest ZEW surveys, economic sentiment in the Eurozone’s largest economy turned positive again this month, strengthening EUR exchange rates in spite of some concerns from analysts.
Going forward EUR investors will turn to the virtual EU summit on Thursday. Will EU leaders be able to coordinate their response to the coronavirus or will the meeting highlight more cracks in EU unity?
US Dollar (USD) Bolstered by Skittish Investors
The US Dollar (USD) pushed higher again during yesterday’s trading session, with investors flocking to the safe-haven currency after the collapse in US oil prices and drop in Brent crude spooked markets.
Rumours North Korean leader Kim Jung Un may be gravely ill further underpinned demand for the safe-haven ‘Greenback’.
Looking ahead, the US Dollar may maintain its upward trajectory so long as market uncertainty builds.
Canadian Dollar (CAD) Undermined by Oil Rout
The Canadian Dollar (CAD) ticked lower again on Tuesday as the ongoing slump in oil prices took its toll on the commodity sensitive ‘Loonie’. CAD investors largely ignored slightly stronger-than-expected domestic retail sales figures in February.
Australian Dollar (AUD) Buoyed by Solid Retail Sales Figures
The Australian Dollar (AUD) trended higher overnight in response to some stronger-than-expected domestic retail sales figures.
The Australian Bureau of Statistics (ABS) reported sales growth jumped by 8.2% last month as panic buying of food and other necessities more than offset falls in other sectors.
New Zealand Dollar (NZD) Muted amid Falling Commodity Prices
The New Zealand Dollar (NZD) was mostly rangebound overnight, with the ‘Kiwi’ struggling to find support as its appeal was undermined by sliding commodity prices.