- Virus induced economic worries and Brexit weigh on pound
- Euro hits five year low versus franc
- Dollar looks set for weekly gain
- GBPUSD fell to an interbank low of 1.2167 yesterday, after investors feared that coronavirus led economic worries as well as Brexit concerns will be too much for the pound to handle. The UK government refuse to extend the Brextit transition period beyond December as well as negotiate with the EU on trade terms which is all weighing sterling. The pound is in its fourth consecutive day of losses and is the worst performing G10 currency so far this month, having fallen more than 3% against the dollar since the end of April.
- The euro hit a five year low versus the Swiss franc yesterday on coronavirus fears and worries on the state of the eurozone economy. Against the USD, it held firm above 1.08 where it currently sits.
The dollar looks set for a weekly gain as markets hopes of a swift economic recovery started to fade. In the US, some economic forecasts are showing that the economy could contract by 35% in the second quarter which would be staggering. Furthermore, increasing tensions between the US and China are also giving investors cause for concern. As usual, as risk sentiment wanes, the safe haven currencies come to the fore. The dollar is up about half a percent on the yen this week and half a percent against a basket of currencies.