Beyond Currency

"The European Union has accused the UK negotiators of being inflexible in negotiating a trade deal between the two. The deal would serve as the basis for a future relationship once Brexit takes place on December 31st.

There have been rumours for a considerable time that the negotiations are not running smoothly but the advent of Coronavirus has led to them taking second place for the time being.

"

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.

"Since the Chancellor of the Exchequer announced on March 23rd that the Government was prepared to offer several schemes to help companies, the self employed, and individuals survive the effect of coronavirus, banks have been left with something of a hot potato.

Under pressure to lend as quickly and simply as possible, they have been concerned about the risk they face and have charged significantly higher interest rates to their customers than they would in a normal market.

"

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 continued its recent rally as the latest round of lockdown easing started. Schools reopened for certain age groups while several open-air businesses were able to start trading again.

Yesterday's release of data for manufacturing was as predicted a very slight improvement on the April figures. This strengthened the market's believe that the economy has, in fact, bottomed out as has been predicted recently.

"

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.

Data for Manufacturing output will be released later this morning with market expectations for a very small increase from the 40.6 level seen this month. This should provide the pound with further support as it will be another indication that activity has bottomed out.

It was a political truism spouted at the time of the last election campaign (which was only a little more than six months ago) that if Labour couldn't win with Brexit negotiations in such a shambles and accusations that they had been mishandled from day one, then they could never win.

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.

"Boris Johnson is getting closer to putting the entire Dominic Cummings lockdown breach to bed through his sheer bloody-mindedness. His move along, nothing to see here metaphor has worn down reporters who live by the maxim that today's news is tomorrow’s chip paper.

The voracious political press have done all they can to damage the Government and Johnson’s Chief Advisor simply because he is seen as a shadowy figure who is never held to account. Well, he has certainly been forced to account for his actions between the end of March and the middle of April and while the Governments poll rating may have fallen a few pips, in the long run very little will change.

"

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.

"Sterling struggled to make any headway above its high from the previous day yesterday as the markets concerns over a no deal Brexit combined with the coming recession drove it lower.

On top of those two concerns, the market is still considering the effect should the Bank of England decide to drop official interest rates below zero. However, the more optimistic comments from Chief Economist Andrew Haldane on Tuesday settled traders worries to a certain extent.

"

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 Bank of England’s Chief Economist Andy Haldane in an interview yesterday said he saw the possibility of a shallower than expected recession given the fact that activity and output indices are already bottoming out.

Haldane’s cautious optimism which counters the less factual and more gut-felt reactions of a month ago will be seen by the market as an indication that the Bank of England may have completed the extraordinary support it has been giving the market since the pandemic crisis began."

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.

On a day when the UK was supposed to be having a Public Holiday despite lockdown restrictions, the Prime Minister’s Chief Advisor faced a grilling from the press over his actions in travelling 280 miles to his parent’s farm to self-isolate.

In an announcement more relevant to getting the country’s economy moving again, Johnson announced that from June 1st, open air markets and car showrooms could reopen and from June 15th, all retail premises could also reopen. This is, of course, subject to social distancing measures.

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 PMI’s for May released yesterday were better than market expectations and a significant improvement on last month. Taken in isolation the numbers were somewhere between appalling and abysmal, but in light of the lockdown and the measures being taken by the Government to keep the economy above water, the data was somewhat comforting.

Having said that, it was still well below the worst ever seen bar last month and the downturn is likely to be significantly more severe than 2008.

"

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.

"Inflation in the UK fell to its lowest level in more than four years last month as economic activity in addition to the precipitous fall in the price of oil saw the Consumer price index fall to 0.8% year on year.

With Tuesday’s employment report, also for April, adding concerns over the recovery of the economy once the lockdown is over, Chancellor Rishi Sunak predicted that it could take longer than originally expected."

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.