There was a slight change of direction for the Pound on Tuesday as the currency made some gains on both the Euro and the Dollar at 1.1213 and 1.225 respectively according to the Foreign Exchange Market. This happened despite the UK experiencing a significant increase in unemployment levels. Along with this, inflation fell during April and this could see the Bank of England implement negative interest rates.
It was a different story for the Euro yesterday despite the German ZEW economic sentiment coming in better than expected. However, the decline during May meant that investors were unwilling to move forward with international payments and investments as the Eurozone continues to struggle through the pandemic. It is expected that the Euro will also struggle through today although only time will tell.
An improvement in risk appetite meant that there was limited demand for the US Dollar. Along with this, poor performances across the housing and construction sectors also fed into the poor performance on Tuesday. The US economy is still struggling to gain any traction and it looks as though it might require further support from the Federal Reserve, an action that will not be well received with investors.