Forex News Roundup For May 24, 2020
Forex News Roundup: GBP Weakness Continues, USD Falls Further Against Mexican Peso
Our Forex News Roundup brings you up to speed with the global currency market's happenings over the past couple of days. The coronavirus has unsurprisingly continued to dominate price movements in the Forex market, but other political and economic developments have also influenced some currency pairs in recent days.
Pound Remains Weak Against US Dollar (USD)
The Great British Pound has fallen considerably against the US Dollar and other major currencies, such as the Euro (EUR), so far this month, and this downwards pressure is likely to continue, according to FX analysts.
This has come as a surprise to some, especially as other major currencies have also been depreciating to other non-G10 currencies. For example, the US Dollar has continued to fall against the Mexican Peso (MXN), as explained later on.
However, the British Pound has fared worst of most of the major currencies since the coronavirus pandemic escalated in February after investor concerns were raised. These concerns largely stem from doubts over the government's ability to pay back the hundreds of billions of pounds it has taken out in public debt to fund its Covid-19 emergency financial response package.
US Dollar Continues to Slide Against Mexican Peso
The US Dollar fell by around four percent relative to the Mexican Peso this week and the greenback is vulnerable to further falls against other currencies amid the Covid-19 pandemic, according to analysts.
However, falling oil prices could provide some respite for the USD in this particular battle, as Mexico is one of the world's largest exporters of crude oil. It will be interesting to see how competing market and political factors continue to influence the US Dollar's relative strength, but for now at least it seems that some of the selling pressure has abated.
Washington-Beijing Tensions Remain Central to USD Pricing
While the coronavirus pandemic is currently the single most important determinant of price swings in the Forex market, the seemingly never-ending trade dispute between the US and China remains an important factor. The pandemic has added fuel to the fire, with Beijing and Washington criticizing each other's handling of the crisis and hurling accusations back and forth.
There's always a threat of new sanctions being announced in this ongoing trade dispute, which could spook investors and add further selling pressure on the US Dollar during this very turbulent economic period.
Forex News Quick Summary
The Covid-19 pandemic is unsurprisingly continuing to dominate the headlines in the Forex market and it is impacting countless different currency pairs due to its wider political and economic knock-on effects.
The Great British Pound has continued to fall against many major currency pairs, including the US Dollar and the Euro, continuing its downward trend since the pandemic escalated outside of China earlier this year.
Meanwhile, the US Dollar has fallen by around four percent against the Mexican Peso this week. This particular currency pair has been at the center of attention for American forex investors and traders, with regular swings taking place due to related economic and political factors.
For now, the selling pressure on the USD has abated, but it is still at risk of another downward spiral as investors remain anxious about the country's mounting Covid-19 death toll, the pandemic's impact on the economy, and the government's handling of the crisis.
Lastly, China-US tensions remain important to the market despite the pandemic dominating the headlines in recent months. Both Beijing and Washington have threatened to introduce further sanctions (or at least retaliate if more sanctions are imposed) as the two economic behemoths remain embroiled in their trade dispute.