This morning, UK GDP for Q1 2020 was revised downwards from -2.0% to -2.2% which has kept the Pound from recovering any recent losses. Prime Minister Johnson is set to make a speech in which he will bring forward plans to spend £5bn on infrastructure in order to stimulate the economy. Health Secretary Hancock has announced that lockdown restrictions will be imposed on Leicester starting today after a surge in cases. UK companies have been pressed to review their supply chains with tensions increasing between the UK and China over the passing of security legislation that gives China new powers over Hong Kong. Overall, the Pound remains weak against the Euro and Dollar.
Yesterday, both German and Spanish consumer price inflation data came out better than expected which gave the Euro some support against both the Pound and the Dollar. Consumer price inflation flash estimates for the Eurozone as a whole are due at 10am which may cause some short-term volatility for the common currency. The Eurozone economic sentiment indicator rose compared to its previous reading but missed expectations although this still gave the Euro a boost.
US Treasury Secretary Mnuchin has said that the US is in a good position to recover from the pandemic and has suggested that further stimulus could be given in order to help certain industries.US CB consumer confidence is due 3:00pm will be closely watched by the market. Several FOMC members as well as Federal Reserve Chairman Powell will be making speeches later in the afternoon and any comments about the state of the US economy as well as its recovery from the coronavirus pandemic will be scrutinized. The Dollar remains the favoured currency at the moment due to its safe-haven status.