Prior to the Covid-19 pandemic, the majority of UK companies employed an on-site workforce to conduct the day-to-day running of their business, with only 27% of employees having worked from home at some point in 2019, on average.
- Pound’s run of gains comes to an end
- Euro fluctuates as EU’s response to the coronavirus prompts concern
- US dollar extends uptrend in spite of payrolls disappointment
GBP rally runs out of steam
A downward revision to the finalised UK services PMI for March left the pound on a weaker footing heading into the weekend.
The PMI dropped from 53.2 to 34.5, representing the sharpest monthly decline in the report’s history and stoking fresh anxiety over the economic outlook.
With the UK economy looking set to experience a major downturn in the first quarter, which it may struggle to rebound from, GBP exchange rates were left on the back foot.
A negative revision in the UK’s construction PMI could add to the pressure on the pound this morning.
EU response to coronavirus crisis in the spotlight
Trade in the euro was mixed at the end of last week, with some upbeat retail sales figures offering support to the single currency, while ongoing concerns over EU fiscal unity capped the upside in the single currency.
EUR investors will remain focused on the EU’s fiscal response to the crisis, with the situation potentially driving the euro lower unless leaders are able to reach an agreement over the issuing of joint debt.
US dollar gains despite massive decline in US employment
The US dollar continued pushing higher on Friday as safe-have demand was bolstered by coronavirus jitters.
This came in spite of US payrolls printing far weaker-than-expected last month, with a decade low contraction of 700,000 against estimates of a more modest decline of 100,000.
In fact the abysmal data spurred demand for the US dollar as it heightened concerns over the damage the coronavirus will do to the global economy. Analysts at TD Securities noted:
‘Once the dust settles and the recessionary mindset is now afoot, the USD is still the best of a bad lot. We struggle to think that any of the majors poses a threat to the depth and liquidity of the world's reserve currency.’
With Coronavirus remaining in the spotlight the US dollar is likely to maintain its dominance as safe-haven demand persists.
Monday, 6th April 2020
14:30 CAD Bank of Canada Business Outlook Survey
15:00 USD Consumer Inflation Expectations
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)