FX Market Report 18/05/2020

Euro Dollar

EUR/USD is trading above 1.08 support level, defying odds by recovering several times last week. However, the single currency is facing a number of risks ahead which could push it back to 2020 lows, including Federal Reserve Chairman Jerome Powell cautioning of a lengthy recovery and unemployment in the U.S. remaining above 25%. The pair could face further losses in the coming weeks as China-U.S. trade tensions mount.

The Cable

The Pound-to-Dollar exchange rate is trading at around 1.21, with the British currency facing further losses in the weeks to come. The Pound fell more than 2% to 1.2104 against the greenback last week and endured substantial losses against a basket of major currencies, amid uncertainty over Brexit and the British government’s handling of the pandemic.

The Chunnel

GBP/EUR is trading at 1.1182, after closing its worst week since the peak of coronavirus panic last Friday. The pair could attempt a stabilisation over the next few days as it nears support on the charts, although analysts believe a recovery would only be temporary and that the exchange rate is facing another big blow later.

Aussie

The Pound-to-Australian Dollar is trading at 1.8802, with analysts favouring the AUD over the Sterling. GBP remains rooted in a multi-week sell-off against the Australian Dollar, resulting in a bearish stance over the exchange rate at the start of the week.

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The Loonie

The Pound-to-Canadian Dollar is trading at 1.7078, eyeing support levels between 1.6804 and 1.6971 after the pair suffered heavy losses last week. The Pound ceded ground to all but one major rival currency.

Gold

Elsewhere, gold was seen hitting a new 7-and-a-half-year-high, above $1,760, as central banks prolonged their bond-buying schemes and negative rates are rumoured.

 

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