Beyond Currency

"The pound suffered from some home grown pressure yesterday as inflation fell to its lowest level in four years driven by a 17% fall in fuel prices at the pump and major discounting from clothing and footwear retailers providing price cuts to shift summer stock having missed out on the first month of the news season.

The upturn in sales seen over the first few days of the lifting of lockdown restrictions has barely scratched the surface of the surplus stock so with underlying prices continuing to fall, low inflation is likely to be a factor for some time to come.

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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.

Current data releases in most major economies seem to be following the same trend; bad but could have been much worse. The population is now seeing the effect of the pandemic in black and white as the Government struggles with the dilemma of public health versus the economy. 600k jobs were lost in the three months to May, pointing to the biggest jobs crisis in more than 25 years. With the Government's furlough scheme and other support mechanisms paying the wages of more than 9 million workers the potential effect of the pandemic on the economy has been dampened down according to some analysts.

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 pound gained a little ground yesterday as a meeting between UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen ended on a positive note with both committed to finding a way around the current impasse over a post Brexit trade deal and promising in Johnson’s words to put some oomph into the talks.

Yesterday was the first day of phase two of the easing of lockdown restrictions with non-essential retailers being allowed to open for the first time since March 23rd."

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 shrunk by a little over 20% in April, the first full month of the Covid-19 lockdown. This was the worst data on record, but really only serves as a confirmation of what has been said for some time; that the UK, developed and global economies will all suffer as a result of the pandemic. No two recoveries will be the same, just as no two economies are the same.

The OECD has said that it believes that the UK economy will be one of the worst hit in the developed world, but as Chancellor, Sushi Sunak said in a pair of TV interviews yesterday, that is hardly surprising given UK activity and output are driven by services which will be the last areas to reopen."

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.

"With little data to go on regarding how countries in Europe are faring having begun to open up a few weeks ago, Johnson faces a difficult decision that he will have to take blind about how to retain social distancing when non-essential retail reopens this Monday.

Today will see a slew of data released. The monthly GDP data for April, together industrial production figures will both provide confirmation of just how bad Q2 will be.

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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.

"An analysis of the prospects for the developed world and its efforts to escape the effects of the Covid-19 pandemic has concluded that the UK may be one of the worst affected of the affluent nations.

The study released yesterday concluded that due to the UK’s lack of a manufacturing base it is extremely reliant upon the performance of the global economy and its predominantly service driven economy will lead to a longer lead-in period to a complete return to normal than other nations.

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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 pound is struggling to make further gains against the dollar as analysts begin to express concern over the Government’s Covid-19 strategy and the ability of the economy to cope with both the pandemic and an impending no-deal Brexit.

As the UK prepares for a further easing of lockdown restrictions with non-essential shops to open next Monday, despite some major retailers deciding that it is not yet safe to do so, the Government has performed a U-turn over the return to school before the summer of children in the younger age group. This confused policy has led to concerns that the Government’s strategy is being decided on the hoof."

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 rise in the value of Sterling has clearly been primarily driven by recent weakness in the dollar and there is a distinct feeling that a correction from current levels is a more likely scenario than a continued drive towards the 1.3000 level.

The two main issues facing the UK Government; Covid-19 and Brexit will remain throughout the summer with the end of this month set to be a watershed in its dealing with both.

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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.

"Today the new rules over quarantine for travellers arriving in the UK come into force. The protests from the travel industry and airlines highlight the Government’s dilemma over the pandemic and the economy.

Across the UK, there is a clear divide between public concerns about how safe it is, or can be, to lift the lockdown, even using baby steps and the long-term effect of the job losses that are bound to occur as the recession begins to bite."

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.

"Despite the pressure that businesses in the UK have faced over the Covid-19 pandemic, Prime Minister Boris Johnson told them yesterday to prepare for departure from the Single Market and Customs Union on December 31st.

With thousands of businesses of all sizes on the brink of collapse despite the Government’s packages of support, analysts had believed that the negotiations may be extended but with a 30th June deadline for the UK to request one, any hopes that that may happen are fading.

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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.