Pound Sterling edged away from the recently struck 1-month peaks against its rivals the Euro and US Dollar after the International Monetary Fund issued a dire warning about the global economic forecast. According to the IMF, the global economy is likely to shrink nearly 3% during this year, propelled lower by the collapse of economic activity in the wake of the Coronavirus. According to the report, that will result in the steepest downturn in 90 years, since the days of the Great Depression. The grim outlook boosted the appeal of the US Dollar as a safe haven currency. Analysts point out that the economic suffering will vary from country to country; for example, some believe that the UK could see its economy shrink by about 13%.
As of 11:21 am in London, the GBP/USD was trading at $1.2531, a loss of 0.7684% and off the earlier low of $1.24984. The EUR/USD was also lower at $1.0929, down 0.5451%; the pair has ranged in this session from a trough of $1.09202 to a high of $1.09927. The USD/JPY was higher at 107.3270 Yen, up 0.20% and off the session peak of 107.517 Yen.
Markets Focus on Data
In the trading day ahead, markets will be watching for news of US Retail sales numbers for March and industrial production figures; economists have predicted that both sets of numbers will have fallen farther into negative territory. The Federal Reserve's New York State Manufacturing Survey is also due out with analysts predicting a fall in the reading to -35. In Canada, the Bank of Canada will be releasing its monetary policy statement; economists don't foresee any change to the existing interest rate at 0.25%. What will be more relevant will be the accompanying statement to gauge the economic outlook of the BOC's voting members. Currently, the USD/CAD is trading at C$1.4040, a gain of 1.14%; the pair has ranged from C$1.38756 to C$1.40449.