The Pound strengthened against both the Euro and the Dollar yesterday morning but ran out of steam at around midday. A joint committee of UK and EU government officials has held discussions regarding how to handle the Northern Ireland part of trade negotiations in order to maintain the Good Friday Agreement. Prime Minister Johnson has declared that the UK is ‘past the peak’ of the coronavirus outbreak, but urged caution as lifting lockdown restrictions too quickly could a ‘second spike’ in cases.

Next week, Johnson will set out a comprehensive plan on easing restrictions which will be closely watched by the market. UK manufacturing PMI data was released at 9:30am this morning and came out slightly worse than expected although this has had very little impact on Sterling.

The Eurozone economy contracted by its sharpest pace on record, with preliminary GDP estimates for Q1 2020 showing a contraction of 3.8%. In addition, German unemployment increased by 373K compared to 75K that was forecasted. This led to the Euro losing ground against the Pound yesterday in the morning. In the afternoon, ECB President Lagarde warned that economic growth in the Eurozone could fall by as much as 12% this year and that the impact of the coronavirus will probably be more severe in Q2 than Q1. Lagarde also mentioned that the ECB is prepared to provide further monetary stimulus if need be. This gave the common currency a boost against the Dollar and helped it recover some of its losses against the Pound from earlier in the morning.

Yesterday, US unemployment claims showed an increase of 3.8 million since last week with this news causing the Dollar to weaken in the afternoon. US manufacturing data will be released mid-afternoon today which may cause some short term volatility. President Trump is rumoured to be considering blocking a US government retirement fund from investing in Chinese equities, which may be the start of increased tensions between the US and China.