Beyond Currency

"Although talk of a vaccine to protect against Coronavirus becoming available before the end of the year has been going on for some time, the fact that it is now reasonably certain that it will happen has taken markets by surprise.

The Government, while being naturally cautious, must be incredibly relieved as it was reaching the point where the effect on the economy of further lockdowns would become almost impossible to support.

The boost to confidence of both business and consumers could be a game-changer according to Bank of England Chief Economist Andrew Haldane. It is clear that while the rollout of the vaccine will take several months, the news will provide a vision of a light at the end of the tunnel."

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Yesterday, the drugs firm Pfizer announced that they have developed a vaccine that they say is effective in 90% of cases of Coronavirus. This provided a boost to the financial markets with the shares in businesses involved in the most affected sectors making significant gains.

While excited by the news, Prime Minister Boris Johnson sounded a note of caution and told the country in a news conference yesterday afternoon that the basics of social distancing, hand washing and the wearing of masks should be maintained to stem the tide of infections."

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"It is becoming more and more likely that the Bank of England will cut interest rates in the coming weeks and take them into negative territory for the first time.

Bank of England Governor Andrew Bailey has been canvassing the opinion of the banks, who essentially, control the practicalities of the money market, for their views on what the effect will be on their business. Once that review is complete, the MPC will decide.

Having already added a further £150 billion to its bond purchases, it is clear that the Treasury and Central Bank are working in unison to ensure that the country is prepared financially for whatever happens following the current lockdown.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Yesterday, the Bank of England and Treasury joined forces to provide support to the economy, and those most affected by the Coronavirus Pandemic.

Andrew Bailey, the Governor of the Bank of England announced that the Bank would increase the level of its purchases of Government debt from £300 billion to £450 billion.

Despite his own concerns over the level of borrowing needed to fund an extension, Chancellor Rishi Sunak announced in Parliament that the furlough scheme under which the Government funds 80% of the wages of those furloughed would now last until next March.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Overnight, legal challenges to the election results in the States of Pennsylvania, Wisconsin and Michigan were the entirely predictable outcome of President Trump’s penchant for the dramatic coupled with a childish inability to accept when a situation is not his liking

Trump’s ability to attract controversy like a magnet has been with him all through his business career and has accompanied him on what could turn out to be a brief sortie into politics.

While he has done rather better than the polls predicted, Trump’s behaviour yesterday when he declared that he had already won the election but was in danger of being fraudulently cheated out of it, was fairly typical.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The counts continue in the U.S. following the closing of polls overnight.

Tight races are expected with Covid-19 concerns currently outweighed by the economy as the most important topic to voters according to exit polls.

Continued expectations and projections can do little more, even now, than predict a tighter race even than had been forecast.

Stories are coming in of results that defy the opinion polls with Key Trump supporter Lindsay Graham retaining his Senatorial seat against seemingly overwhelming odds in South Carolina.

The closer the race becomes, the more concerns there will be about fraud over postal voting from Trump and stumbling over the finish line for Biden.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The UK economy is about to take another massive hit as England will enter a period of lockdown for one month starting on November 5th. The measures were announced on Saturday by Prime Minister Boris Johnson as estimates were released that showed that the country could face up to 4k deaths a day without action.

The lockdown will hit the hospitality and tourism sectors hard and predictions are being made that up to 30% of pubs and restaurants may not reopen. Johnson announced that the original furlough scheme, which ended on Saturday would remain in place for the entire period of the lockdown.

The scheme has cost an estimated £40 billion already and this will add to Chancellor Sunak’s sleepless nights as he prepares his spending plans that will be released in three weeks’ time.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The UK economy is about to take another massive hit as England will enter a period of lockdown for one month starting on November 5th. The measures were announced on Saturday by Prime Minister Boris Johnson as estimates were released that showed that the country could face up to 4k deaths a day without action.

The lockdown will hit the hospitality and tourism sectors hard and predictions are being made that up to 30% of pubs and restaurants may not reopen. Johnson announced that the original furlough scheme, which ended on Saturday would remain in place for the entire period of the lockdown.

The scheme has cost an estimated £40 billion already and this will add to Chancellor Sunak’s sleepless nights as he prepares his spending plans that will be released in three weeks’ time.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The UK is facing a further contraction in its economy unless it increases spending on supporting jobs during the second wave of Covid-19. That is the opinion of the IMF which downgraded its forecasts for UK GDP in 2020 and 2021.

The economy is now expected to contract by 10.4% this year and recover in 2021 growing by 5.8%.

In order to invigorate the economy, the IMF recommends that the Bank of England increases its support for the economy by increasing its bond purchases. Support should last as long as the rate of infections remains according to the Fund’s Managing Director."

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Rishi Sunak announced a few weeks ago that he was abandoning plans to produce his budget and three year spending plans due to uncertainties caused by the Pandemic, but yesterday he confirmed that on November 25th he will present a one year spending review to Parliament.

This will have three main purposes; funding for the NHS, protecting jobs and ensuring that Government departments have sufficient funding to deal with issues arising from Covid-19. From this it has been deduced that projections show that new infections will be close to peaking at that time. This will provide a degree of certainty to those Ministries directly affected by spending on the Pandemic.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.