Pound (GBP) Subdued Following Record Fall in GDP
The Pound (GBP) was left mostly muted through the end of last week’s session as the UK reported a 20.4% contraction of GDP in April.
Given the data covered the UK’s first full month of lockdown, GBP investors appeared to take the dramatic slump in their stride as they focus instead on how quickly the UK economy may be able to mount a recovery.
Looking to the coming week, Sterling may experience volatility in response to a host of UK economic data and the Bank of England’s latest rate decision.
Sterling may derive some support today from the re-opening of non-essential shops in the UK.
Euro (EUR) Undermined by Gloomy Industrial Production Figures
The Euro (EUR) was mostly rangebound on Friday, with the single currency struggling to find support on the back of some grim industrial figures from the Eurozone.
The European statistics agency reported industrial production in the bloc plunged 17.1% in April, the largest ever decline in factory output as coronavirus lockdown measures prompted business closures.
The main catalyst of movement in the Euro this week looks to be the latest ZEW surveys. Will an improvement in economic sentiment across the Eurozone help boost the single currency?
US Dollar (USD) Dips Following Thursday’s Rally
The US Dollar (USD) ended last week just below its best levels for the session after the ‘Greenback’s huge surge on Thursday prompted some end of week profit taking.
These losses proved limited however, with the US Dollar finding some modest support following data showing a better-than-expected rise in US consumer sentiment this month.
USD investors will now be focusing on the latest US retail sales figures and an expected rebound in consumer spending.
Canadian Dollar (CAD) Gains Despite Oil Slump
The Canadian Dollar (CAD) ticked higher on Friday, with the oil-sensitive ‘Loonie’ strengthening in spite of a drop in crude prices amid growing fears of a second wave of coronavirus infections.
Australian Dollar (AUD) Undermined by Coronavirus Fears
After a modest pick up on Friday, the Australian Dollar (AUD) opens this week on the back foot after fears of a second wave of the coronavirus (following a cluster of infections in Beijing) sparked some selling of risk-sensitive assets.
New Zealand Dollar (NZD) Slumps in Risk-Off Trade
The New Zealand Dollar (NZD) is also off to a poor start this week, as some weak data from China combined with second wave fears undermines investor confidence.