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31 March 2020

The US Dollar ascent stalled in the latter part of last week, as markets reacted positively to central bank and government responses to the pandemic. This also boosted equity markets but conditions remain extremely volatile. Sterling was one of the main benefactors of the boost in sentiment but came under renewed selling pressure yesterday, as rating agency, Fitch lowered its default rating to AA- from AA. They cited the weakening public finances and ongoing Brexit uncertainty as the main factors behind the drop. UK Q4 GDP was confirmed at 0.0%, while the current account deficit was narrower than expected.

The World Bank warned yesterday, the economic fallout caused by the pandemic could force as many as 11 million people in East Asia into poverty. They went on to say that, this was causing an unprecedented global shock and would bring global growth to a halt.

In better news, Chinese PMIs have come in above expectations for March, with Manufacturing at 52 and Non-Manufacturing at 52.3. Both were expected to come in under 50 – reflecting contraction.

Later during the North American session, the economic docket features the release of the Chicago PMI and Consumer Confidence figures. Both will be closely monitored for signs of the economic fallout hitting home in the figures.

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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

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