The Pound has started to gradually recover some of its losses against both the Euro and the Dollar as the focus shifts away from trade negotiations with the EU which so far have seen limited progress. However, both Bank of England Chief Economist Haldane and MPC member Tenreyro have commented that there is a possibility of introducing negative interest rates in the UK, which kept the Pound from making further gains.

This morning, UK employment data was released which showed that the number of people claiming unemployment benefits has far exceeded expectations with an increase of 856,000, suggesting that the current furlough scheme needs to be complemented by extra support.

The German Bundesbank believe that once lockdown restrictions are lifted, their economy will experience a drive in momentum towards economic growth towards the back end of Q2. Germany and France have proposed a €500 billion fund which would be distributed to the worse effected economies in the Eurozone which would be raised by the European Commission and provided as grants. European Commission President Lagarde has said in response that this is a ‘welcome’ plan and a step in the right direction. This has given the Euro some strength against the Dollar. Eurozone and German ZEW economic sentiment figures will be released at 10am which is likely to cause some short term volatility for the common currency.

With China committing to increase their funding to the World Health Organization, President Trump has called the health body a ‘puppet of China’ and believes there is a lack of independence. He has also threatened to pull US funding permanently if there are no ‘improvements’ in the next 30-days which could increase tensions. Nonetheless, White House advisor Hassett indicated that China has been honouring the phase one trade agreement with the US. This led to the Dollar losing some of its recent gains against both the Pound and Euro. The market is waiting for Federal Reserve Chairman Powell to make his speech at 3pm this afternoon and will look out for any comments regarding the future interest rate path in the US.