2020 was a difficult year for not just the manufacturing sector but for the whole UK economy, with the global coronavirus pandemic disrupting almost every industry in some way and resulting in uneven demand for manufacturers throughout the year.
- Pound mixed before UK budget
- Euro rises despite Italy quarantine
- US dollar sell off continues
Pound fluctuates ahead of UK budget
Trade in the pound was mixed at the start of the week, with the UK’s relatively limited outbreak of the coronavirus allowing for a modest uptick in Sterling.
The currency was able to gain against a broadly softer US dollar and higher-risk currencies like the Australian and New Zealand dollars.
A focus on tomorrow’s UK budget could limit movement in the pound today.
Euro gains as US dollar tumbles
Broad-based weakness in the US dollar propelled the EUR/USD exchange rate to a new 1-year high yesterday.
The uptick in the single currency came in spite of rising fears that Italy is hurtling towards a recession as the quarantining of the entire country further disrupts the nation’s economy.
The euro may be pressured lower today if the publication of the Eurozone’s latest GDP figures highlights just how vulnerable the bloc is to a recession. The data is set to confirm growth in the bloc slowed to just 0.1% at the end of 2019.
US dollar extends losses
The US dollar was caught up in another sell-off at the start of this week’s session, with the currency plummeting in line with a sharp fall in US bond yields.
The slump in US yields comes as markets price in expectations for a deep rate cut from the Federal Reserve next week. Analysts are currently predicting the bank could slash interest rates to near zero in an effort to limit the economic impact of the coronavirus.
The US dollar may continue trending lower if US yields plummet further and USD investors grow increasingly concerned about the spread of the disease throughout the country.
Tuesday 10th March
10:00 EUR Eurozone GDP
21:45 NZD Card Spending Retail
22:00 AUD Westpac Consumer Confidence
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)