The Pound has lost some ground against both the Euro and the Dollar as credit rating agency Fitch also downgraded longer-term issuer default ratings to AA- from AA.

Both uncertainty regarding UK-EU trade negotiations and increased public spending due to the coronavirus were seen as the main culprits for this. There are calls from the European People’s party to extended trade negotiations beyond the transition period as it is ‘the responsible thing to do’.

The Euro has weakened after consumer confidence and economic sentiment indicators disappointed the market. Germany’s Ifo has said that the Bavarian region of the country could be financially impacted by 8-15% of its GDP if firms remain shut for another two months. This would have a significant impact on the German economy as a whole, as Bavaria accounts for around 18% of Germany’s GDP. Italy has announced that they will be extending the lockdown until 12th April, as the number of virus cases per day declined yesterday compared to the previous day.

The Dollar has strengthened once again due to its safe-haven status as there are concerns that a recession should develop globally. US CB consumer confidence data is due at 3pm, which may cause some short-term volatility.