The USD rallied from safe-haven flow on Thursday
The GBP fell this morning as Industrial Production and Manufacturing Production fell to record lows. Industrial Production was down 20.3% and Manufacturing Production was down 24.3%.
This follows a dark day for UK jobs on Thursday. In which some of the UK’s largest employers announced mass redundancies, bringing the total number of jobs lost or at risk to more than 22,000 this week. Of the businesses planning to cut jobs this week, British Gas announced plans to cut 5,000 jobs, BP announced plans to cut 10,000 jobs whilst Heathrow Airport admitted plans to cut jobs for frontline workers.
The USD rallied from safe-haven flow on Thursday amid a global stock-market selloff, as concerns over a global economic recovery and a possible second wave of coronavirus cases in the US dampened market sentiment.
Markets had shifted to risk-off following Wednesday’s Federal Reserve meeting which painted a very bleak picture for the US economy. At the meeting, Fed Chair Jerome Powell warned of a “long road to recovery” with no expected rate hike until 2022 and forcasted the US economy to shrink by 6.5% with unemployment rising to 9% by year end.
Also, with lockdown restrictions being lifted in the US, signs of a second wave of coronavirus cases have raised alarm bells for investors as fresh cases have taken the US over the two million infections mark. The new infections, along with the hint of a slow economic recovery for the US, has dampened investor sentiment and lead to global stock-markets suffering their biggest one-day decline since March.
Fresh economic data for the US was also pretty damning for the world’s biggest economy. Despite initial jobless claims falling to 1.5m, unemployment claims remained at record highs as 20.9m people were recorded as claiming unemployment benefits.
15:00 USD Michigan Consumer Sentiment Index (June) Expected 75 Previous 72
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