21 February 2020
The pound weakened further yesterday, hitting 2020 lows against the dollar, as Brexit concerns weighed on demand. A Reuter’s poll suggested the chances of a disorderly Brexit have increased from 20% to 25% in recent weeks, which has slightly spooked investors. The sell-off occurred despite another batch of upbeat data in the form of Retail Sales. January saw a 0.9% increase on the month, beating the 0.7% expected.
ECB top officials thought that easing trade tensions had reduced the risks to the Eurozone economy, according to the minutes from the latest policy meeting. They also added that slowly building inflationary pressures might provide a boost to the economy. However, reaction to the release was muted and it is worth noting the meeting happened before the worst extent of the coronavirus outbreak occurred.
The dollar continued its bull run, with further optimism brought about by upbeat data. The latest showed the Philadelphia Manufacturing Index surged to 36.7 for February from 17 previously. On top of this, the greenback continues to avail of its safe-haven status, as the market remains sensitive to updates on the virus.
Data and Events
Markit will release the preliminary estimates of the UK February PMI this morning. The Manufacturing Index is expected in at 49.7 from 50.0 in January. Services output is also expected to be down marginally for February. The Eurozone and US PMIs are also out.
Trading overseas? Before you buy or sell currency, discover how you can save on your foreign currency payments with a quote from Fexco. Sign up for a free account or contact us (Ireland: 1800 246 801 UK: 0800 840 2887) to discuss your payment needs, as we can guarantee to provide a bespoke solution that aligns best with your business.
Please note that this update is provided by Fexco Corporate Payments for your information only. It does not constitute advice. You must rely entirely on your own judgement when making an Order and entering into a contract with Fexco Corporate Payments and any decision you make to buy and/or sell currency is made solely on your own judgement. Fexco Corporate Payments is regulated by the Central Bank of Ireland and is regulated by the Financial Conduct Authority for the conduct of payment business in the UK