Following on from Wednesday’s speech, Chancellor Sunak has warned that not all jobs can be protected as the UK is entering ‘one of the most severe recessions’ on record. This week’s post-Brexit trade negotiations between the UK and EU has ended with the EU admitting that there are ‘significant’ differences of opinions between the two parties. ECB President Lagarde believes that a no-deal scenario would be hurt the Eurozone’s chances of a quick economic recovery following the coronavirus pandemic. This has helped the Pound keep its strength as the market is more optimistic that a compromise will be made in order to push a deal through before the end of the transition period.

The Euro is largely unchanged against the Pound and Dollar. ECB member Villeroy has suggested that the ECB is ready to be innovative with regards to their monetary policy if need be to help the Eurozone economy recover. He also mentioned that France should leave their tax rate unchanged and keep its fiscal policy stable for the next few years to help their recovery. Reuters have reported that the EU is ready to consider allowing Croatia and Bulgaria to adopt the Euro as their denominated currency within the next 3 years. The German trade surplus has increased further with exports expanding more so than imports.

US unemployment claims released yesterday afternoon came out better than expected at 1314K compared to the predicted figure of 1375K. Nonetheless, this did little to help the Dollar regain strength as the market chose to focus on the recent optimism regarding the global economic recovery form the coronavirus pandemic and progress with developing a vaccine. US Treasury Secretary Mnuchin has praised President Trump’s response to the coronavirus adding that although economists expected 40 million jobs to be lost, the actual figure is only 22 million.