Return to daily updates Thursday May 14th 2020

Pound hits five week lows


  • Pound hits five week lows
  • Fed Chair Powell says no to negative rates
  • Eurozone economy looking bleak


  • The pound has moved below 1.22 for the first time in five weeks versus the dollar as economic data, virus fears and worries about lockdown weigh. A stronger dollar also contributed. The pound also hit a six-week low versus the euro. Yesterday, it was announced the UK economy fell by -5.8% in March which was better than expected however came with concern these numbers will get worse over the coming months. Markets will also be focusing on Brexit risks, where talks are ongoing.


  • The ECB have released an economic bulletin suggesting all will not be well for some time. A combination of profound deterioration in labour markets conditions, GDP falling 5 and 12% this year and well as lower inflation will all weigh on the eurozone. Markets will also continue to eye the German court ruling to ECB bond purchases and how that plays out. That said, the euro held firm against the pound, but fell against the all conquering dollar to 1.08.


  • The dollar hit a three week high after risk sentiment worsened within financial markets as well as the Fed Chair Powell dismissing speculation about negative rates. Markets had started to price in that the US could well adopt the negative rate policy, however while Powell urged more fiscal policy support, he stated it would be “unlikely” we saw the move to negative interest rates. Against a basket of its rivals, the dollar edged 0.15% higher at 100.30, hovering below a three-week high of 100.44 tested earlier this week.

Amir Mehrad
Market update by Amir Mehrad
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