UK services PMI data disappointed the market on Friday, which put the Pound on the back foot throughout the day. Consumer confidence has also fallen to levels last seen during the financial crisis of 2008. Prime Minister Johnson has been admitted to hospital after failing to shake off coronavirus symptoms for 10 days, with today’s Covid-19 meeting due to be chaired by Foreign Secretary Raab.
This news, along with the rise is coronavirus related deaths in the UK, means that the Pound is susceptible to further volatility at the start of this week. The Labour leadership results were announced this weekend, with Starmer beating Long-Bailey and Nandy to win the race to become opposition leader.
Eurozone retail sales came out better than expected at 0.9% compared to 0.1% that was forecasted. German factory orders released this morning were also were encouraging but largely ignored by the market. Coronavirus death rates have slowed in Germany, Italy, Spain and France which will provide some support to the Euro. Finance ministers across the Eurozone will hold a call tomorrow to attempt to come to a compromise agreement over an emergency rescue package to help governments, businesses and the general public across the Eurozone.
On Friday, US non-farm payrolls increased to -701K whilst analysts predicted a figure of -100K to be released. In addition, the unemployment rate increased to 4.4%. This in turn actually strengthen the Dollar due to its safe-haven status as the market saw a flight to safety by participants. Later in the afternoon, US final services PMI and ISM non-manufacturing PMI data both beat the market’s expectation which further boosted the Dollar.