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German factory orders declined 1.4% for March following a revised 4.8% increase the previous month. The Euro-zone Sentix investor confidence index declined sharply to -42.9 for April from -17.1 the previous month which was below consensus forecasts of -30.5 and the lowest reading on record.

There were reports that Germany was set to outline proposals of requirements to ease lockdown measures with the transmission to pandemic control from lockdown as quickly as possible, but the infection rate would need to be below 1.0 and the current rate is well above this level. Austria will also relax restrictions slightly on April 14th

A further decline in the Spanish death toll also helped underpin confidence in the single currency.

Overall funding pressure remained lower in global markets which limited potential dollar buying as liquidity improved, although there was still an underlying reluctance to sell the US currency given a fundamental lack of confidence in alternative major currencies.

The US March employment trends index declined sharply to 60.4 from a revised 109.3 the previous month, but there was no significant impact from the data.

Overall, the Euro found support on approach to 1.0775 and settled around 1.0800 at the European close.

Markets will be monitoring Tuesday’s Eurogroup meeting and any agreement to issue coronabonds would tend to support the Euro. The dollar overall lost ground amid hopes that the global coronavirus crisis could be approaching a peak which limited underlying defensive US demand and the Euro strengthened to the 1.0830 area.




The yen was unable to gain any renewed support in Europe on Monday. Sentiment was again undermined by expectations that Japan would declare a state of emergency while the firm tone in global equities also undermined potential Japanese currency support.

The dollar pushed to highs around 109.35 before drifting lower as the currency overall was unable to sustain its best levels. US equities, however, made further gains into the New York close which underpinned dollar confidence and US yields edged higher as it traded above 109.00.

House of Representatives speaker Pelosi has pushed for another round of direct payments to US citizens with a second overall package of at least $1.0trn and President Trump also voiced support for another round of payments which helped underpin risk appetite.

Japanese Prime Minister Abe announced a fiscal stimulus worth $1.0trn while a state of emergency was expected to be declared in Tokyo and six other prefectures. US equity futures edged lower on Tuesday, although Asia markets made net gains. China reported that there were no new deaths related to coronavirus for the first time since January which helped underpin sentiment. Overall, the dollar retreated to the 108.70 area amid wider US losses, although with buying support on dips.


The UK March PMI construction index declined sharply to 39.3 from 52.6 the previous month and the lowest reading since April 2009. All three sub-sectors contracted on the month and, although the residential sector showed some resilience, there were expectations of a sharp decline for April amid pressure to halt construction operations. There was a sharp decline in new orders and overall business confidence declined to the lowest level since October 2008.

Sterling was resilient after the data and gained some net support from reassurances that Prime Minister Johnson would be leaving hospital soon. The firmer tone in risk appetite was also a significant positive factor for the UK currency. The Euro retreated to the 0.8765 area while Sterling closed just above 1.2300 against the dollar.

The currency, however, dipped sharply lower later in the New York session after Prime Minister Johnson was taken into intensive care as a precaution. There was a slide to lows below 1.2200 against the dollar with the Euro peaking just above 0.8850. Sterling was able to secure a tentative recovery on Tuesday with an advance to near 1.2270 against the dollar, although the Euro held just above 0.8800 as markets waited for updates on the Prime Minister’s condition. 


Swiss sight deposits increased to CHF627.2bn in the latest week from CHF620.5bn the previous week. Although lower than the increase recorded last week, it was still the second-highest increase over the last 12 months which indicated that the bank had still been intervening relatively aggressively to curb franc appreciation. In this context, the bank will be concerned that the Euro was trapped close to 1.0550. There was only a slight Euro recovery by the European close with the dollar unable to push through the 0.9800 level. The Euro crept higher on Tuesday with the dollar around 0.9760 as markets monitored global risk conditions.



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