The pound slipped this morning, falling back from its monthly highs against the dollar and euro, after a dire global economic forecast from the International Monetary Fund diminished risk appetite broadly, boosting the dollar.
The global economy is expected to shrink by 3.0% during 2020 in a coronavirus-driven collapse of activity that will mark the steepest downturn since the Great Depression of the 1930s, the IMF said.
It is not (yet) clear whether economies will recover quickly or whether it might take longer than assumed.
A weakening global economy enhances the safe-haven appeal of the U.S. dollar as it is the major currency in global trade and the predominant medium of exchange in world markets.
Britain’s budget forecasters said that the country’s economy could shrink as much as 13% this year due to the government’s coronavirus shutdown, its deepest recession in three centuries, with public borrowing set to surge to a post-World War Two high.