The pound reached its highest for the week on Thursday as expectations of rate cut from the Bank of England fell in light of comments from the incoming governor Andrew Bailey. He told lawmakers that the bank should wait until there is further clarity on the economic damage of the coronavirus. The pound rose by 0.6% against the dollar but lost 0.1% against a stronger euro.

Analysts still believe that UK interest rates will be lowered by 0.5% in March in order to avoid the UK going into a recession in the coming months. Others have lowered Britain’s economic growth forecast by 0.5%.

GBPUSD opened at 1.2871 and rose steadily across the day, closing at a high of 1.2942

GBPEUR opened at 1.1572 and fell to a low of 1.1529 near midday before recovering slightly to close at 1.1552

The dollar took further losses on Thursday as investors believe that the Federal Reserve will continue its monetary easing policy to combat the effects of the coronavirus. The dollar index fell 0.8% against a basket of six major currencies, falling 1.2% against the Japanese yen.

Data released on Thursday showed that the number of people filing for unemployment benefits was lower, suggesting the labour market was resilient in the face of the virus outbreak. However, this did little to boost the dollar.

Elsewhere the Canadian dollar fell against its US rival as the Bank of Canada made its biggest interest rate cut in over 10 years.

EURUSD opened at 1.1122 and climbed steadily across the day closing at a high of 1.1203