The UK’s coronavirus death toll has increased to nearly 30,000 making it Europe’s highest, surpassing Italy who previously had the most deaths on the continent. UK final services PMI came out slightly better than anticipated at 13.4, compared to the forecasted figure of 12.3 but still indicated that the industry is struggling due to coronavirus related restrictions.
Prime Minister Johnson is set to announce the government’s roadmap in easing lockdown restrictions on Sunday which will be of interest to market participants and is likely to decide the direction of the next leg for the Pound. Nonetheless, the Pound has made further ground against the Euro but has struggled against the Dollar.
The Euro lost ground yesterday as the German constitutional court ruled that the ECB did not respect proportionality when it came to allowing Germany to purchase bonds to stimulate its economy. This led to fears that there may be further friction between the ECB and Germany over the current stimulus measures aimed at helping with the impacts of the coronavirus pandemic. Italian PM Conte has suggested that it is not up to any court to decide what the ECB can or cannot do, suggesting that tensions are high between the Northern and Southern EU member states. EU economic forecasts are due later today which is likely to be revised downwards and watched closely by the market, whilst Eurozone retail sales are due at 10:00am.
The Dollar has continued to strengthen against both the Pound and the Euro due to increased global uncertainty as tensions have increased between the US and China which has led to the greenback benefitting due to its safe-haven status. US ISM non-manufacturing PMI came out better than expected at 41.8 although the release did show a substantial drop compared to its previous reading of 52.5. The employment section of this reading showed a huge increase in unemployment, which may be a sign of things to come when US non-farm payrolls and the unemployment rate is released on Friday afternoon.