The Pound has held up against a weak Euro but struggled to make gains against a strong Dollar.
Yesterday, CBI industrial order expectations came out worse than expected at -56. This morning, UK retail sales fell 5.1% for the month of March, which is its biggest decline on record. However, Chancellor Sunak is reportedly willing to offer 100% guarantees on small business loans which could benefit up to 1 million companies This has given some confidence to the market and provided the Pound with some support.
Members of the EU have agreed to set up a coronavirus recovery funds and also provide €540 billion in financial support. According to European Commission President von der Leyen these measures will provide a €1 Trillion boost to the Eurozone economy. Whilst Italian PM Conte suggested that ‘great progress’ had been made, French President Macron and German Chancellor Merkel both suggested that problems still remain. This injection of investment has meant the Euro has weakened as the supply of the common currency has increased. This morning, German Ifo business climate data dropped to 74.3 which is worse than had been anticipated and has put the Euro on the backfoot for today.
US unemployment claims disappointed the market with a reading of 4427K compared to the predicted 4350K figure, although this didn’t seem to have much of an effect on the greenback as the market chose to focus on its safe-haven status. This was followed by mixed results, with manufacturing PMI slightly beating expectations whilst services PMI dropped to 27.0. Congress has passed a new Coronavirus relief package worth $484 billion which will come into effect on Tuesday.