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The Pound started Friday on the defensive as retail sales data had reinforced unease over underlying economic trends and demand fears. Michel Barnier criticised the UK for not engaging seriously on some Brexit discussion topics and reiterated a partnership trade deal requires a level playing field and fisheries agreement. Barnier, however, stepped back from calling directly for a transition extension at this stage. There will be substantial pressure on the next phase of scheduled talks as time pressures intensify.

Sterling edged lower after Barnier’s comments, testing the 1.2300 area against the Dollar and below 1.1430 against the Euro, but by mid afternoon Sterling was back above 1.2350 again. Futures market data revealed the speculative Sterling position had turned negative again which should limit the potential for sell offs.

The Prime Minister’s return to Downing St boosted Sterling sentiment and rumours that a modification of lockdown rules could be made this week will add to that. Global risk appetite is firm as the Pound opens near the 1.2450 area on the Dollar and 1.1470 on the Euro.


US durable goods orders declined 14.4% for March compared with consensus forecasts of an 11.9% decline, but the core retreat was held at 0.2% compared with expectations of a 5.8% decline as orders in the auto sector dipped sharply by 41%. Non-defence capital goods orders declined 33.4% on the month. The April University of Michigan consumer confidence index dipped to 71.8 from 89.1 the previous month, although this was above consensus forecasts. 

The US dollar lost further ground this morning, as aggressive Federal Reserve bond buying continued with the Euro against the USD near 1.0850.


The German IFO business confidence index declined from 85.9 to 74.3 for April and below consensus forecasts of 80.0. The current conditions index dipped from 92.9 to 79.5 with a less severe retreat in expectations to 69.4. The IFO was also very cautious over the outlook with only a slow and gradual return to normal economic activity likely unless there is a breakthrough in drug treatments or a vaccine.

The Euro has started positively since the market open with a push towards 1.1880 on the cards should the positivity remain, the down side however is also a possibility with 4-week lows coming in around 1.0730 level. As of writing the common currency trades at the 1.1840 against its US counterpart.

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