Sterling had a bad day on Wednesday, suffering at the hands of a bullish dollar and negative rhetoric.

Following confirmation Stateside that negative interest rates were not an option, the pound lost 0.5% versus the US dollar to touch its lowest level in more than five weeks. Against the euro, sterling hit a six-week low.

Bank of England Governor, Andrew Bailey, intimated yesterday that further funding may be necessary to counteract a possible second wave of the virus. He confirmed that the UK will endure a very sharp move into recession, but that this was not unexpected.

GDP is forecast to slump by 25-30 per cent this quarter, with yesterday’s figures showing a 5.8% decline in March alone. Although this figure was slightly better than expected, it did not prevent the pound losing ground.

In early trading today, sterling continues to struggle and is trading below the 1.13 level versus the euro. Governor Bailey is due to speak again later.

GBPUSD opened at 1.2269 and fell in the afternoon, closing at 1.2237

GBPEUR opened at 1.1317 and dipped to 1.1272, before closing at 1.1308

The US dollar climbed towards a three-week high yesterday and into this morning, as risk appetite widely deteriorated after Federal Reserve Chairman, Jerome Powell, dismissed speculation about negative interest rates.

Despite also commenting that the US is facing a prolonged period of weak growth, investors scurried back to the relative safe-haven of the greenback.

The Dollar Index was up 0.23% on the day at 100.26, having fallen as low as 99.57 earlier in the session.

In the eurozone, the single currency enjoyed a resurgence against a broadly weaker pound. This is entirely due to UK factors amid a lack of action in the EU.

The euro is maintaining those gains so far this morning.

Meanwhile, Greece, France, Spain, Portugal and Italy have all set out tentative plans to ease lockdown measures in the past few days, offering some hope to battered markets.

EURUSD opened at 1.0841 and climbed to 1.0886, before dropping back and closing at 1.0821

In other news the Australian dollar fell 0.3% after data showed unemployment increased by 594,300 in April, slightly more than the median estimate. The jobless rate rose to a five-year high.

The New Zealand dollar continues to lose ground amid speculation of negative interest rates. The government unveiled a record NZ$50 billion fund in its budget earlier today, but warned that this may not be enough.