After months of pressure and political scandal, the UK government introduced a windfall tax on North Sea oil and gas at the end of May 2022.
- GBP/EUR and GBP/USD trending lower
- EU restricts European travel
- US dollar buoyant despite rate cut
Pound remains at multi-month lows
The pound struggled to find support on Monday, with Sterling sentiment fluctuating as the UK government’s ‘heard-immunity’ approach to the coronavirus came under increasing criticism.
Both the GBP/EUR and GBP/USD exchange rates remained at multi-month lows.
The UK is still reluctant to implement any social distancing measures and (unlike its European neighbours) is yet to close schools or restrict public events.
With a growing number of experts questioning the effectiveness of the government’s approach, there appeared to be little appetite for the pound at the start of the week.
The latest jobs report may offer some modest support for the pound if wage growth rose back above 3% in January as part of a wider post-election bounce.
Euro fluctuates as EU countries step up coronavirus response
The euro fluctuated throughout yesterday’s session as EU countries introduced even more drastic measures to prevent the spread of the coronavirus, including the restriction of travel to Europe.
EUR investors will be focusing on the latest ZEW surveys, with the euro potentially facing headwinds if economic sentiment in Germany and the wider Eurozone declined this month.
US dollar supported by safe-haven demand
The US dollar initially stumbled at the start of this week following the Federal Reserve’s announcement it would be slashing US interest rates to near zero.
However, it didn’t take long for the safe-haven currency to claw back its losses as demand was buoyed by another dramatic stock market sell-off.
The upside in the US dollar could be tempered this afternoon by the latest US retail sales figures if they report a sharper-than-expected slowing of sales growth last month.
Tuesday, 17th March 2020
09:30 GBP Average Weekly Earnings
10:00 EUR Eurozone ZEW Economic Sentiment Index
12:30 CAD Manufacturing Sales
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)