Beyond Currency

"Sterling remains under pressure and is still the worst performing currency in the G10 this month, despite two reasonably strong days so far this week.

The confusion over the partial lifting of the lockdown, the reopening of schools and the ability of the Government to get funds to those who most need it, is more a testimony to the return of industrial relations woes and the ineptitude of Boris Johnson’s newer recruits than a concern over the spread of Covid-19."

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 is considering the benefits of allowing interest rates to fall into negative territory as a means of stimulating the UK economy. This would be unprecedented in Britain, but would follow Japan, Switzerland, The Eurozone, and Denmark which currently have negative rates.

While this is seen as a radical move, one which BoE Chief Economist Andy Haldane sees as not being the first port of call, the concept itself is as simple as it sounds.

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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 had its worst week since the lockdown began last week as concerns over the pace at which the economy can recover from Covid-19 mixed with concerns over the intransigence of both sides regarding Brexit to create a toxic cocktail.

The Government’s plans to provide a little comfort to the population in the shape of a marginal lifting of restrictions appear to be close to unravelling as Trades Unions try to ensure the safety of their members in light of what they consider to be the unplanned and uncontrolled of the return to work, in particular the plans to see children of certain ages return to school. This is slated by the Government to happen on June 1st but according to several Government ministers, this will only happen if it is safe to do so.

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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 realization, despite previous warnings, of a severely damaging recession has finally hit home pushing Sterling to its lowest level since early April.

An economy which is completely dominated by the services sector is bound to suffer a longer and more painful slowdown as that is the area that will be most delayed in reopening and suffer from the most severe cash flow issues.

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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 released data yesterday for Q1 GDP yesterday. Speculation has been growing for several weeks about just how deep the recession caused by the Covid-19 pandemic will be.

Despite the lockdown only being in place for a little over a week of the first quarter, the economy contracted by 2%. This is in line with other G7 countries and each is now estimating the size of the devastation of the current quarter. The current consensus for the UK, is for a 30% fall in Q2 which is totally unprecedented in peacetime.

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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.

Published Description

"The continued chaotic response from the world’s most powerful economy defied any kind of logic. With over 80k deaths and around 1.25 million infections, it is impossible to predict just when there will be a degree of control being exerted.

The U.S.’ most revered expert on infectious diseases Anthony Fauci has already said a second spike in Autumn is already possible even before the first wave is under control.

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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 proposals being put forward by the Government to partially lift the lockdown have come in for significant criticism for being confusing and unclear and for putting people’s lives at unnecessary risk.

The proposals which switch the emphasis from stay at home to stay alert, place a far greater responsibility on the public to use common sense to maintain social distancing and minimise contact and risk of infection."

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.

"There is concern, especially from SMEs, that they will be caught in an impossible position where they are able to reopen but the slowdown in activity means they are not operating at sufficient capacity to be able to pay their employees.

There are calls for the review of the scheme to be carried out as soon as next week to allow firms the time to plan how they will operate post-lockdown. "

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.

"If the UK economy needed any further confirmation of the difficult times that lay ahead, it received it in two pieces of economic news that were released yesterday.

First, data for services output fell to its lowest level since records began in 1995 and then Virgin Atlantic announced that it was to cut 3,000 jobs and possibly quit its slots at London’s second major airport at Gatwick."

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 seems it will be virtually impossible to introduce a blanket plan for a return to work and also keep social distancing rules in place. While that is obvious, the traditional enmity between the Government and Trades Unions has bubbled to the surface.

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.