2020.04.2111:33:00UTC+00Pound Weakens As Oil Rout Rattles European Markets

The pound fell against its major counterparts in the European session on Tuesday, as a historic plunge in U.S. crude prices overnight on demand concerns amid Covid-19 pandemic triggered a sell-off in European shares.

U.S. crude futures for May delivery collapsed below zero a barrel mark for the first time in history on Monday.

As countries rush to reopen, the World Health Organization has warned that "the worst is yet ahead of us" in the coronavirus outbreak and that "it's a virus that many people still don't understand."

The coronavirus death toll in the U.K. could be 40 percent higher than reported, the Office for National Statistics has said. Data from the Office for National Statistics showed that the UK unemployment rate increased in three months to February, while the employment rate reached a record high.

The jobless rate rose 0.1 percentage point from the previous quarter to 4 percent, which was slightly above economists' forecast of 3.9 percent.

The pound dipped to near a 2-week low of 0.8789 against the euro, from a high of 0.8726 set at 5:30 pm ET. Next key support for the pound is likely seen around the 0.89 level.

Survey data from the ZEW - Leibniz Centre for European Economic Research showed that German economic confidence improved strongly in April.

The ZEW Indicator of Economic Sentiment advanced 77.7 points to 28.2 points in April. This was well above the forecast of -42.3.

The pound depreciated to near a 2-week low of 1.2315 against the dollar from Monday's closing quote of 1.2431. The next possible support for the pound is seen around the 1.21 level.

Extending early slide, the pound hit 132.23 against the yen for the first time since March 27. The pound is poised to challenge support around the 126.00 mark.

The pound dropped to 1.1953 against the franc, its lowest level since April 8. If the pound falls further, it is likely to test support around the 1.14 region.

Data from the Federal Customs Administration showed that Switzerland's exports declined for a second straight month and at a faster pace in March, mainly due to massive fall in shipments of machinery and electronics and watches, that offset the strong demand for chemical and pharmaceutical products amid the coronavirus pandemic.

Exports decreased by a real 4.0 percent month-on-month in March, following a 3.1 percent fall in February. Shipments of machinery and electronics slumped 18 percent, while demand for chemical and pharmaceutical products grew 6.6 percent.

Looking ahead, Canada retail sales for February and U.S. existing home sales for March are set for release in the New York session.