GBPUSD and its march higher has started to tail off, with prices dropping back to 1.2230 overnight. At 01:30 GMT, there was a mini flash-crash in price across several currency pairs, perhaps a fair reflection of the volume, volatility and overall twitchiness of the markets. GBPEUR remains stable at the 1.12 level with both currencies seeing volatility dry up somewhat.
South Africa was stripped of its last investment rating yesterday by Moody’s triggering further weakness in the already volatile currency, resulting in USDZAR reaching all-time highs and GBPZAR also seeing some healthy percentage gains (up 15.5% from March 1st).
Brexit news has taken an obvious backseat, but the centre-right faction of the EU’s parliament has called on the UK to extend its post-Brexit transition period. The US and UK trade talks have also been put on-hold whilst countries go into self-preservation mode.
High impact news of any significant worth includes Canadian GDP at 13:00 GMT. The consensus is to see a drop from 0.3% to 0.1% With both logging and oil as their prime economic drivers, these numbers will only begin to reflect their slowdown.
At 14:00 GMT, we also have US data in the form of the Chicago Purchasing Manager’s Index which is expected to drop nine points from 49 to 40. The Dallas manufacturing index reached an all-time low yesterday, so be prepared for some Dollar movements.
On a positive note, Volkswagen has resumed car production in 22 of their 24 factories in China which is a promising sign of industrial recovery, albeit treading carefully.
Joshua and I recorded a webinar yesterday on how Covid-19 has impacted the financial markets. This will be available to watch soon as well as answers to some of the interesting questions that were raised. Please keep in touch with your account manager about your immediate and future currency news – there’s plenty we can help with.
Have a great day.
Author: Alistair Huston, Private Dealing Manager
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