RationalFX : Sterling remained under pressure on Monday as government officials announced that it was still too soon to talk about ending the lockdown, despite smaller than average daily increases in the death rate…….
Britain has now reported over 16,000 Covid-19 related deaths, and these figures do not yet include deaths in the wider community. In the immediate sense, sterling is unlikely to gain much more from current levels. This is reinforced by the fact that net long positions on the pound were cut in the week to April 14, meaning that it will be harder for the pound to pick up in the short term.
Economic activity has been frozen in Britain as a result of the pandemic and a deep recession looks all but certain. Bank of England member Ben Broadbent also echoed comments from Governor Andrew Bailey last week where he said that a 35% contraction in the economy did not look unrealistic for the UK.
Safe haven flowed back to the dollar at the end of US trading on Monday after the price of crude oil futures crashed to below zero. This is a direct result of the pandemic, with supply being hit and demand sagging. This is likely to have a dire direct impact on many businesses in the sector and commodity driven currencies are expected to be especially hit.
10:00 EUR- German ZEW Survey for Economic Sentiment; expected to rise to -42.3 from previous -49.5
Source : ETFWorld.co.uk