DAILY MARKET NEWS: US Economy Suffers Largest Contraction Since 2008
The pound suffered from a lack of sentiment on Wednesday and so, it was put on the defensive again as Brexit uncertainty caused further problems. Foreign Secretary Dominic Raab made it clear that the government had plans to extend the Brexit transition period, causing problems for the currency. For investors who are looking to make international payment and investments, the lockdown exit strategy is one area of significant importance but until they are released, the pound is likely to be held back. When Wednesday came to a close, the pound came in at 1.1468 against the Euro and 1.2471 against the dollar according to the foreign exchange rates.
Things looked slightly more promising for the Euro yesterday although any gains were halted as the Eurozone readied itself for the economic releases taking place today. Euro investors are likely to find themselves busy as the European Central Bank’s rate decision and the first quarter GDP figures are going to be heavily scrutinised.
The US suffered a big blow on Wednesday as economic growth shrunk by 4.8% which is the biggest contraction since the end of 2008, bringing the longest period of growth in US history to a stop. All of this meant that the US Dollar struggled to gain any traction and so, investors decided to shy away from the safe-haven currency.