As the coronavirus pandemic continues, Chancellor Rishi Sunak has unveiled a Budget that is unsurprisingly focused on supporting individuals and businesses though these difficult times.
- GBP could dip after services PMI
- Drop in Eurozone consumer confidence dents euro
- Another sharp uptick in jobless claims could weigh on the US dollar
Weak UK services PMI forecast to drag pound lower
The pound ticked up from a two-week low on Wednesday as improving market sentiment extended some support to the currency.
However, gains were capped by the UK’s consumer price index as domestic inflation was shown to have slowed to a three-month low in March, with the coronavirus lockdown stifling demand for fuel and clothing.
Sterling could come under further pressure today as UK PMI figures are expected to report growth in the UK’s private sector fell to a new all-time low this month.
A drop from 34.5 to 29.0 would signal a major slowdown in the service sector, highlighting the risk of the economy shedding even further momentum in the second quarter.
Plunge in Eurozone consumer confidence weighs on euro
Eurozone consumer confidence fell by more-than-expected in April, plunging from -11.6 to -22.7 as sentiment across the currency union soured.
This left the euro on a weaker footing against its rivals on Wednesday as concerns over the prospect of an uneven Eurozone economic recovery grew.
Today the Eurozone is forecast to report a dramatic drop in economic activity, but this may have limited impact on the euro ahead of the virtual EU summit.
EUR investors will be looking for leaders to reach some kind of consensus on how to fiscally respond to the coronavirus.
US dollar braces for latest surge in initial jobless claims
Rallying oil prices and an improvement in market risk appetite saw the US dollar stumble yesterday.
Concerns over the outlook of the US economy may pick up this afternoon on the back of the latest initial jobless claims figures.
Although the forecast increase of 4.5 million would be smaller than those seen in recent weeks any further uptick in the unemployment rate could still weigh on USD exchange rates.
Thursday, 23rd April 2020
09:00 EUR Eurozone Manufacturing PMI
09:30 GBP Services PMI
13:30 USD Initial Jobless Claims
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