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.
- Surprise change in UK Chancellor prompts pound rally
- Underwhelming German growth forecast limits euro appeal
- US dollar struggles to capitalise on higher inflation reading
Pound rallies as Chancellor of the Exchequer resigns
Demand for the pound rose sharply on Thursday after the surprise resignation of Chancellor of the Exchequer Sajid Javid.
With Javid’s departure Downing Street looks set to exert greater control over the Treasury, suggesting that an increase in spending is likely in the upcoming budget.
However, GBP exchange rates may struggle to hold onto their gains for long as the EU appears prepared to adopt a tougher negotiating stance.
As long as the two sides seem ready to clash the risk of further Brexit-based disruption could weigh on the pound.
Euro losses forecast on underwhelming Eurozone GDP report
Even though the European Commission left its 2020 growth forecasts unchanged this failed to benefit the euro yesterday.
As France, Germany and Italy appear set to deliver the slowest growth out of the EU27 this year the risk of weaker Eurozone growth increased.
Confirmation that the Eurozone lost further momentum in the fourth quarter of 2019 could see the single currency slip lower still this morning.
Steady retail sales to offer US dollar support
A stronger-than-expected uptick in the headline US consumer price index offered limited support to the US dollar yesterday.
As the CPI is not the Federal Reserve’s preferred gauge of inflation the improvement the report’s impact was minimal.
However, this afternoon’s advance retail sales reading may encourage fresh US dollar gains as long as sales growth remains solid.
Signs that US consumers continued spending in January, in spite of global growth worries, could help the US dollar push higher against its risk-sensitive rivals.
Friday, 14th February 2020
10:00 EUR Eurozone Gross Domestic Product
13:30 USD Advance Retail 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)