IFX Market Report: Friday 20th March 2020

The pound rebounded against the dollar and euro on Thursday after the Bank of England cut interest rates to a record low of 0.1%, helping support the pound after it had sunk to its lowest level since 1985. The Bank also ramped up its bond-buying programme to further mitigate the effects of the coronavirus on the UK economy.

Sterling had fallen around 12% against the dollar over eight days of trading prior, hitting a low of $1.1450 on Wednesday. Despite the pound’s rebound, it remains at levels not seen since 1985, when the Plaza Accord was signed by the world’s wealthiest nations to weaken the dollar and help the US economy out of recession.

Against the euro the pound did better, rebounding from an 11-year low of 95 pence per euro earlier and was last up 2.1% at 91.70 pence.

GBPUSD opened at 1.1501 and climbed across the afternoon to a high of 1.1768 before dropping slightly to close at 1.1631

GBPEUR opened at 1.0598 and performed similarly, reaching a high of 1.0938 and closing at 1.0897

The U.S. dollar rallied across the board on Thursday, as worries about the economic fallout from the coronavirus boosted dollar demand despite recent steps by world central banks aimed at alleviating market stress. The dollar index, which measures the greenback against a basket of six major currencies, rose 2.0%, its highest level since January 2017. The index is up about 4% for the week.

The euro was 2.15% lower against the dollar. Against the Swiss franc, the greenback was up 1.9%, while it gained 2.63% against the yen.

EURUSD opened at 1.0844 and fell across the day, closing at a low of 1.0671

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