On Friday, the Pound continued to strengthen against both the Euro and the Dollar even though PM Johnson was tested positive for the coronavirus. However, over the weekend a report from the CEBR has predicted that the UK’s economic output could drop by 15% in Q2 2020 which has put the Pound under pressure early this morning. In addition, rating agency Fitch downgraded the UK’s credit rating from AA to AAA-.
German consumer price index inflation data is due to be released today which could cause some short-term volatility. The Euro remains on the back-foot as the coronavirus death toll in Italy rises above 10,000. Eurozone industrial confidence, consumer confidence and business climate data figures are due this morning which will be closely monitored.
President Trump signed off on the largest ever US stimulus package worth $2tn on Friday, which led to the Dollar being sold off against the Euro and the Pound due to increased supply. US consumer sentiment figures fell to 89.1 which was its second biggest monthly decline, contributing to the Dollar weakening further on Friday. However, since the markets reopened yesterday evening, the greenback has been supported due to its safe-haven status as many economies have extended or tightened their lockdown measures over the weekend (for example, the US has extended federal guidelines until 30th April).