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May 07, 2020 | Monthly Currency Outlook

Currency Market Outlook - May 2020

Our May report outlines the key events and drivers that our analyst team expect to impact FX currency markets in the weeks ahead.

Written by George Vessey, UK Currency Strategist 

Highlights include:

USD: The U.S. currency’s immediate prospects appear solid with the drumbeat of dismal global data likely to grow louder in the weeks ahead.
CAD: Things could get worse for the loonie before they get meaningfully better. Market eyes will be fixated on Canada’s economy, oil markets and coronavirus developments.
GBP: The correlation between market risk aversion and sterling weakness suggests if deep and long recession risks continue to increase, the pound may be sold alongside other riskier assets.
EUR: How will the euro lure investors away from US dollar? Successfully winding back lockdowns will be key. The stakes are double here: to avoid a second wave of contamination and ensure a quick and safe return to work.
JPY: The trajectory of the Yen will depend on two things: the spread of Covid-19 across the globe, and how quickly the global lockdown policies are lifted.

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*Source: UK FX Barometer 2019 – Western Union Business Solutions