The pound made gains against a weaker dollar after the emergency rate cut by the Federal Reserve. Most investors think the UK will do the same. The pound was up around 0.5% against the dollar but was weaker against the euro. Some analysts put around an 80% chance of the Bank of England cutting rates in March.
Trade negotiation fears are being overshadowed by the spread of coronavirus, but some analysts have discussed a lack of desire to be long in sterling at the current time due to the high downside risk.
GBPUSD opened at 1.2810 and though there was some volatility, the pair closed slightly higher at 1.2820
GBPEUR opened at 1.1513 and dropped in the late afternoon to close at 1.1472
The dollar index fell 0.41% as an emergency rate-cut in the light of the coronavirus’ impact. The US currently has scope to cut rates but many other countries around the world have already hit record lows with their interest rates.
The Australian dollar was 0.84% higher after the Reserve Bank of Australia cut the interest rates by 0.25%, as investors were expecting a larger cut. The Japanese ten was about 1% against the dollar and the Swiss franc gained 0.3%, both currencies benefitting from their safe-haven status.
EURUSD opened at 1.1119 and reached a high of 1.1210 before closing at 1.1175