The Pound has continued to weaken as talk of an extended lockdown period in the UK surfaced with Prime Minister Johnson voicing his concerns about a potential second virus peak if restrictions were lifted too early. Bank of England Governor Bailey has also suggested that the government need to be cautious in lifting restrictions as it would be damaging to the economy if the timing wasn’t right.
Consumer price inflation for the month of March released this morning dropped to 1.5% as expected, which had little effect on Sterling.
Yesterday, Italian PM Conte suggested that the government is working on another fiscal stimulus package worth EUR 50bn in order to help mitigate the impact of the coronavirus. Eurozone consumer confidence data is due at 10am this morning, which will be closely watched by the market. Eurozone and Germany ZEW economic sentiment figures surprised the market yesterday, which led to the Euro strengthening against the Pound yesterday morning. However, the Euro remains susceptible to further pressure as Germany’s death toll continued to rise and the number of new daily cases increased to its highest level in 3 days.
The Dollar has continued to strengthen against the Pound and Euro as investors look for safer assets following the decline in oil prices to its lowest levels in over 20 years. New virus cases in the US have continued to increase to its highest level in roughly 3 weeks, which has increased the market’s concerns about the global outlook. The US state of Missouri has decided to sue the government of China over their handling of the virus which has led to economic losses worth billions.