Return to Currency News Tuesday May 26th 2020

Big week for the euro

Headlines

  • Sterling on back foot as pressure on Johnson to fire senior aide
  • Big week for the euro
  • Dollar lower on global optimism

GBP

  • Sterling was on the back foot yesterday, as political pressure grew for UK PM to fire senior advisor Dominic Cummings. Cummings, who was largely considered to be the architect of the “Leave” campaign, is under pressure after travelling extensively during lockdown restrictions. Markets will be gauging how the re-opening of the UK economy goes, as well as Brexit negotiations before deciding on a direction.

EUR

  • The euro was steady yesterday as investors waiting with bated breath on this weeks negotiations on the EU recovery fund to help out member nations. Last week, EURUSD pushed above $1.10 after the proposal, but was sent lower sub $1.09 after the counter proposal was put in. The market will be watching to see how the European Commission’s own plans to deal with such a fund which will have an effect on the euro. 

USD

  • The dollar was higher this morning as optimism about the global recovery grew however issues around the China-US relationship kept any moves in check. The markets see these events as two conflicting currents, on one hand you have re-opening of economies around there world, boosting hopes of economic growth, and on the other, you have rising tensions between two superpowers. The dollar will continue to rally if the concerns overshadow the hopes. 

Other currency news

  • The AUD and NZD pushed higher overnight, but remain below last week highs. The JPY struggled and was a touch lower, while the Chinese Yuan was off the seven month low.

Amir Mehrad
Market update by Amir Mehrad

14 years experience in deliverable foreign exchange, over 7 as CEO of Effective FX

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