There is very little to report for sterling yesterday, with muted movement and a lack of major news.
The British Retail Consortium trade body said on Monday that the number of people in the UK leaving their homes to go shopping has slumped by 83% since the closure of non-essential retail outlets last month. Meanwhile, Chancellor Rishi Sunak launched a new scheme to protect fast-growing and innovative companies from the ongoing economic fallout.
Deputy BoE Governor Ben Broadbent said yesterday that a 35% contraction in the economy in the second quarter did not look unrealistic, backing up budget forecasters’ recent projections.
Earlier today, unemployment benefit claims for March data showed a 12,100 increase, way below the median forecast of 172,500. However, the figure is based on a period before the lockdown came into effect and has failed to lift the pound.
GBPUSD opened at 1.2458 and whilst moving marginally either side throughout the day, closed at the same position 1.2458
GBPEUR opened at 1.1454 and did very little, closing at 1.1464
The US dollar has enjoyed a bounce against most major currencies as investors seek a safe haven after a drastic plunge in oil prices. US crude oil futures dived into negative territory for the first time ever yesterday, impacted by a lack of supply and waning demand due to the pandemic.
With the dollar up 0.5% in early trading today, it appears that the only thing capping the currency is the Federal Reserve having instigated more quantitative easing than anyone else.
The greenback is also being supported by unconfirmed reports that the North Korean leader, Kim Jong Un, is gravely ill following a heart procedure.
The euro has been glued to its 200-day moving average versus the pound, as investors wait for a catalyst to pull the pairing in either direction. The single currency is drifting aimlessly from a lack of data regarding the increased borrowing that will be necessary to fund the recovery from the crisis. This may change on Thursday, when heads of European Union governments are scheduled to hold a video summit over how to tackle the economic fallout.
Earlier today, German Economic sentiment surprised on the positive side, but has had no impact.
EURUSD opened at 1.0885 and closed at 1.0874