18/05/2020

Sterling falls as Bank of England considers negative rates


GBP

Sterling continued its struggle against a basket of currencies this morning following comments from the Bank of England policymaker, Andy Haldane, that negative interest rates are possible for the UK in the near future to counteract the economic slump caused by the coronavirus.

Haldane’s comments added to sterling’s woes from Friday which saw the GBP fall to multi-week lows against both the EUR and USD as the latest round of Brexit talks failed to signal any progress. UK Chief Brexit Negotiator, David Frost, stated that both sides were some way from an agreement and blamed the European Union for “novel and unbalanced proposals”.

USD

The US Dollar remains steady at the beginning of the week as Jerome Powell, the Chair of the Federal Reserve, dismissed the idea of the US implementing negative interest rates. Hostilities also continued with China which boosted the ‘safe haven’ US Dollar.

Key announcements

None.


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