Sterling rebounds against EUR & USD
Sterling rebounded against both EUR and USD on Thursday as the Bank of England announced further stimulus measures in an attempt to limit the economic damage caused by the Coronavirus to the UK economy.
Policymakers voted unanimously in cutting the lending rate by 15 basis points to 0.1%, its lowest level since 1694 and announced it would pump £200billion into the economy through its quantitative easing measures by buying government and corporate bonds.
The news resulted in an initial sterling rally of 3%, but by the close of business the rally had eased.
Despite the new measures, sterling remains at multi-year lows against both EUR and USD and vulnerable to further losses. Sterling’s reliance on the inflow of foreign investor capital may prevent a significant recovery. In this current financial climate, sterling is a risky asset and most investors are trying to avoid risk where possible.
The euro moved lower on Wednesday following the announcement from the ECB that it plans to introduce a huge quantitative easing programme to combat the negative implications of the coronavirus.
The Pandemic Emergency Purchaser Programme (PEPP) will see the EU spend €750billion in government and corporate bonds before year end.
Why choose RationalFX?
Based in the heart of London’s financial district Canary Wharf, RationalFX has traded over $10billion in currencies across the globe. Take advantage of our competitive exchange rates, market expertise, suite of FX products and online payment platform when you make bank to bank transfers in over 50 currencies worldwide.
Whatever your reason for making overseas payments, we’re confident our currency specialists can save you time and money while providing peace of mind. Call our team now on: +44 20 7220 8181