Sterling falls to multi-year lows
The pound plummeted on Wednesday, resulting in a decade long low against the euro and lows against the dollar that have not been seen since 1985, as investors are panic buying dollars overshadowed monetary stimulus efforts.
Investors rushed to the safe haven of USD and avoided sterling, as appetite for GBP has dampened following the UK’s decision to leave the EU. Traders are currently de-risking their portfolios which has resulted in a sharp sell off in sterling.
The sell-off in the GBP comes despite the announced £330billion lifeline from the Chancellor and comments from the Bank of England that they would not rule out considering cash handouts to citizens.
The euro suffered large losses against the dollar yesterday, despite the European Central Bank announcing a 750 billion euro asset-programme as a direct response to the coronavirus outbreak.
This new programme, which will target public and private sector assets, will be conducted until the end of 2020 and is the latest measure by a central bank in direct response to the pandemic.
However, as with the pound, any response is being overshadowed by the global demand for dollars. It seems that until the number of new virus cases begins to fall, no central bank action will currently be enough.
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