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Pound stabilises as UK employment data surprises

Philip McHugh April 21st 2020 - 2 minute read

  • Prospect of longer lockdown weighs on pound
  • EU tensions in the spotlight
  • US dollar surges as oil prices plummet

UK government caution over Covid-19 lockdown limits pound
The pound kicked off the week on the defensive, retreating in response to the UK government’s apparent reluctance to begin easing its lockdown measures.
Prime Minister Boris Johnson’s is reported to be concerned that lifting restrictions too soon could put the UK at risk of a second wave of infections.
However, Sterling firmed this morning following the publication of the UK’s latest employment figures.
The data showed a smaller-than-forecast increase in people claiming unemployment benefits in March.
Doubts over EU unity persist
The euro traded in a narrow range on Monday as doubts over EU unity persisted ahead of this week’s virtual EU summit.
The common currency could come under additional pressure this morning following the publication of the ZEW economic sentiment surveys if the gauges show that confidence fell further in April.
The Eurozone’s economic sentiment reading came in at -49.5 in March.  
US dollar jumps as oil prices tumble
The US dollar found itself back in vogue at the start of this week’s session as souring market sentiment buoyed the appeal of the safe-haven ‘greenback’.
This was triggered by a sharp plunge in US oil prices, with WTI crude actually falling below zero for the first time in history.
Negative prices mean that oil producers are actually paying buyers to take the commodity off their hands amid growing concern that US storage facilities are nearing max capacity as a result of plummeting global demand during the coronavirus crisis.
However, US housing data for March could take the wind out of the US dollar later today. Economists are expecting a sharp drop in existing home sales.
Upcoming Data:
Tuesday, 21st April 2020
10:00 EUR Germany ZEW Economic Sentiment Index
15:00 USD Existing Home Sales

Written by
Philip McHugh

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