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TWF Currency Update: 28/05/2020

Discussion in 'Money, Accounts & Finance' started by Currencies Direct, May 28, 2020.

Do you sell internationally?

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  1. Currencies Direct

    Currencies Direct

    Feb 6, 2020
    EXCLUSIVE OFFER FOR TWF: Create an account with Currencies Direct and receive a £30 Amazon voucher when you trade £5000!

    TWF Daily Update 28/05/20

    Today’s e-commerce exchange rate update
    For online sellers paying suppliers in foreign currencies, or converting international revenue, exchange rate movements can have a significant impact on profitability – from increasing the cost of invoices to reducing the return on your payments.

    Stay on top of the latest rate movements in minutes with our currency updates.
    • Pound Sterling (GBP)
    The pound (GBP) is steady today after the Office for National Statistics (ONS) announced that 24% of British businesses currently on pause are set to re-start next month, while 31% are expected to start trading more in 4-weeks’ time.

    Meanwhile, Sterling traders are becoming more optimistic that Britain’s Covid-19 outbreak could be under control as the test and trace programme gets under way in England and Scotland.

    However, Bank of England (BoE) Governor Andrew Bailey has warned that the UK’s economic recovery from the Covid-19 crisis could be tougher than previously expected. Despite this, the pound did benefit from Bailey shying away from taking the bank’s interest rate below zero.

    Additionally, fears over a no-deal Brexit persist as talks struggle and a Downing Street spokesperson reiterated the government's position that the Brexit transition period will not be extended, limiting the pound.

    GBP/EUR – Fluctuating around 1.11
    GBP/USD – Trading at 1.22

    • Euro (EUR)
    The euro (EUR) is holding its gains today after the Eurozone’s business climate report for May fell from -1.99 to -2.43. Today also saw the release of May’s Eurozone economic sentiment indicator edge higher from 64.9 to 67.5.

    Optimism in the euro remains after yesterday’s announcement of the EU’s €750bn recovery fund boosted hopes of faster economic recovery. However, some doubts still linger over the health of the bloc’s economy.

    The Eurozone’s mood in the services and construction sectors have continued to deteriorate. This has left many euro investors feeling increasingly concerned for Euro-area’s economic recovery in the months ahead.

    Meanwhile, today is the release of the flash German harmonized index of consumer prices for May. Any signs of the Eurozone’s largest economy’s inflation falling below forecasts would drag on the euro.

    EUR/GBP – Down to 0.89
    EUR/USD – Fluctuating around 1.10

    • US Dollar (USD)
    The US dollar (USD) has remained under pressure from a surge in risk sentiment as hopes of recovering global growth and economies reopening from the Covid-19 crisis limit the appeal of safe-haven assets.

    Meanwhile, investors have been keeping a close eye on US-China trade tensions. With China’s approval of a plan to impose national security laws in Hong Kong, it’s likely tensions will rise, but for now, markets remain in a risk-on mood.

    In US economic news, today is the publication of the flash annualized US GDP report for the first quarter. However, if this falls below forecasts, then we could see the ‘greenback’ benefit from safe-haven demand as the global economy continues to falter.

    Also, the release of the US initial jobless claims figure for May is today. Any signs of this rising would also spark demand for safe-assets as the world’s largest economy struggles to hold back the economic impact of Covid-19.

    USD/GBP – Trading around 0.81
    USD/EUR – Holding steady at 0.91
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