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Pound recovers from 35-year low

business-articlesPound recovers from 35-year low
  • Pound recovers losses vs. euro and USD
  • Euro slides on concerns for Eurozone outlook
  • US dollar extends bullish run as the market flight to safety continues
Pound supported by BoE rate cut
Having plummeted to its lowest levels since 1985 on Wednesday, the pound mounted a comeback yesterday after the Bank of England (BoE) announced its second emergency rate cut this month.
The BoE slashed interest rates to a new record low of 0.1%, whilst also announcing it would be expanding its quantitative easing programme by another £200bn in a continued effort to shield the UK economy from the fallout from the coronavirus and to calm markets.
On top of this GBP investors also cheered reports that Chancellor Rishi Sunak will announce new stimulus measures aimed at protecting jobs, which helped the GBP/USD exchange rate climb back above $1.18 overnight.
Euro stumbles vs USD
It was the euro’s turn to dive yesterday, with the single currency sinking fast against the US dollar as EUR investors grow increasingly concern about how much damage the coronavirus lockdown is doing to the Eurozone economy.
With coronavirus still dominating headlines and influential local data lacking we could see more volatility before the weekend.  
US dollar uptrend eases
While demand for the US dollar continued yesterday it’s uptrend was less significant than earlier in the week.
Fears over a USD shortage eased after the Federal Reserve announced it would provide access to an additional $450bn in dollar swap lines to a number of central banks.
The US dollar was also tempered by the US initial jobless claims report, which revealed a sharp increase in unemployment benefit claims last week due to coronavirus layoffs.
Upcoming Data:
Friday, 20th March 2020

09:00 EUR Eurozone Current Account
09:30 GBP Public Sector Net Borrowing
12:30 CAD Retail Sales
14:00 USD Existing Home Sales
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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