Return to daily updates Tuesday May 19th 2020

Euro boosted by France/Germany proposal

Headlines

  • Sterling off the two month lows
  • Euro boosted by France/Germany proposal
  • USD off and risk sentiment on

GBP

  • Sterling moved off the two month lows versus the dollar and euro yesterday as risk sentiment improved even with chatter about negative rates and Brexit. GBPUSD has already fallen over 3.75% this month alone. By 1518 GMT, sterling traded 0.9% higher against the dollar at $1.22, just off its March 26 low of $1.2075, which it hit during Asian trading hours. Versus the euro, it was 0.4% higher at 89.08 pence, off its lowest levels since March 31.

EUR

  • The euro rallied overnight as France and Germany proposed that the European Commission borrow money on behalf of the whole EU to aid recovery.  This will benefit the countries most effected by the pandemic i.e Spain and Italy. However, gains could be capped this morning if the German sentiment data comes out worse than expected. EURUSD currently sits at 1.0933, up from 1.08 yesterday morning.

USD

  • The dollar was slightly weaker against the major currencies this morning as risk sentiment improved following some positive Covid-19 vaccine trials. This was cemented by a sharp boost in oils prices as economies look to recover and reopen sooner rather than later. 

Other currency news

  • The yuan was steady this morning versus the dollar but investors continue to eye up the China-US relations and both the AUD and NZD moved higher as both central banks could look to ease monetary policy sooner than expected.

Amir Mehrad
Market update by Amir Mehrad
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