Return to Currency News Thursday May 28th 2020

EU proposed fund pushes the euro higher

Headlines

  • Sterling falls as possibility of negative interest rates and Brexit weighs
  • EU proposed fund pushes the euro higher
  • Dollar strength as worries creep back in

GBP

  • Sterling fell across the board yesterday as markets analysed the possibility of negative interest rates as well as progress on Brexit negotiations of lack thereof! Britain once again reiterated that there would be no extension beyond December and that both parties have to get the debate on fisheries sorted by July. The pound was down over 1% versus the dollar  and just shy of 1% versus the euro undoing the pounds good work at the back end of last week.

EUR

  • The euro pushed higher yesterday as and hit a new recent high versus the dollar as the EU’s plan to prop up and reinvigorate the coronavirus hit eurozone economies was well received. A 750 billion euro plan was a good start however doubts crept in that that this could actually be delivered and as such we saw a slight retreat towards the end of trading hours.

USD

  • The dollar was stronger this morning in Asain hours as investors moved towards safety as US-China relations continued to worsen with a war of words boosting the greenback. The US is also currently looking at ways to create problems for China for tightening its grip on Hong Kong with a mix on sanctions, tariffs and restrictions on Chinese companies being prominent in discussions.

Other currency news

  • The AUD and NZD backed off two month highs as recent good sentiment faded, while the Yuan hit a record low of 7.1966 per USD. Safe haven currencies such as the Swiss Franc and Japanese Yen also performed well.

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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