The US dollar fell to two-week lows against its major rivals yesterday after concerns over the US economy’s resilience sapped USD demand.
This kicked off with a 1% plunge in GBP exchange rates at the start of the week after the BoE fueled expectations for an immediate rate cut by vowing to take ‘all necessary steps’ to limit the economic impact of the coronavirus.
These expectations were further stoked by the Federal Reserve’s announcement of an emergency rate cut on Tuesday.
Fortunately for GBP investors the pound began to mount a comeback in the mid-week, rallying on the back of comments from incoming BoE Governor Andrew Bailey, as he suggested the bank would need more evidence regarding the economic impact of the coronavirus before it would make a move.
Tempering these gains however was the conclusion of the first round of trade negotiations between the UK and EU, which laid bare the divisions between the two sides over a number of key issues.
Coming up this week, the spotlight for GBP investors will be on the publication of the UK’s long-awaited Budget.
Expectations for some ambitious spending from the government was a major source of support for the pound through February.
However since then we have seen the coronavirus crisis come to engulf almost everything else. Will this result in a weaker pound if this forces the government to issue a more conservative ‘coronavirus Budget’?
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)