Sterling managed some gains on Friday as investors grew more confident that the United States government and central bank economic stimulus could alleviate some of the impacts of the coronavirus crisis.
The British government on Thursday said it would pay grants to self-employed people who have lost their jobs and income because of the coronavirus lockdown, further extending an unprecedented package of measures to bolster the economy. Finance minister Rishi Sunak had previously announced that the state would pay part of employee wages to dissuade companies from implementing layoffs.
Sterling was up 1% at $1.2345, a near-two-week high. Analysts do not see the pound rising back towards $1.30 - where it was before COVID-19 pandemic - anytime soon. Sterling was also rising by 1.2% against the euro to 89.43 pence, a two-week high. The pound briefly turned negative earlier in the day after British Prime Minister Boris Johnson said he had tested positive for coronavirus.
Analysts said that sterling would continue to be affected by how fast COVID-19 spreads in the UK, where the number of coronavirus cases and deaths on Thursday registered their most significant daily increase since the epidemic reached Britain. The UK missed an opportunity to join an EU procurement scheme for medical equipment to fight coronavirus, because of some confusion with emails, the government said on Thursday.
GBPUSD opened at 1.2222 and climbed steadily to close at a high of 1.2410
GBPEUR opened at 1.1093 and performed similarly, closing near a high of 1.1219
The dollar posted its most significant weekly decline in more than a decade on Friday, as trillions of dollars worth of stimulus efforts by governments and central banks helped temper a rout in global markets driven by the coronavirus pandemic.
The dollar surged in March as tumbling stock, and debt markets caused a scramble for the world’s most liquid currency. But significant government spending pledges and coordinated efforts by central banks around the world to increase the supply of dollars have supported a rally in other major currencies.
The US House of Representatives approved a $2.2 trillion aid package, the largest in American history, to help people and businesses cope with the economic effects of the coronavirus outbreak. The dollar fell 0.87% against a basket of currencies. It fell 3.90% last week - its most significant weekly decline since March 2009.
Against the yen, the dollar fell 1.56%, as Japanese investors and companies repatriated funds before their fiscal year ends next week. The euro gained 0.83% against the greenback, and the Australian dollar rose 1.78%.
EURUSD opened at 1.1018 and fell to a low of 1.0961 before climbing again to close at a high of 1.1073