The Pound Sterling and Euro continue to be volatile today with major announcements from the Bank of England and the Coronavirus situation now officially declared a global pandemic by the world health organisation. The first announcement was the Bank of England’s rate cut which saw the interest rate drop from 0.75% to 0.25%, significant as this came after the official rate decision meeting. Following the announcement the pound saw an instant sell off response.
Shortly after the UK Chancellor of the Exchequer announced that the UK plans a £30 billion injection to shore the UK economy up against the significant effect the COVID-19 virus continues to have on the world
The Eurozone is also awaiting its ECB decision later today which could see the euro shift up. However with President Trump issuing a presidential proclamation stating that those travelling from the 26 countries in the Schengen border-free travel area were barred for the next 14 days the Euro will likely remain under further pressure. Unusually and possibly for political reasons the UK has been left out of the sweeping travel ban.
Yesterday saw the UK’s 2020 budget announced by the Chancellor of the Exchequer following persistent pressure applied by the coronavirus outbreak on the UK’s economy. The virus has now spread throughout the UK, with the number of confirmed cases rising to well over 400 individuals. The pound has seen sustained pressure from the coronavirus as investors worried that the threat could dry up foreign investment in the UK.
UK Chancellor of the Exchequer, Rishi Sunak stated that the UK government will allocate £30 billion for immediate use in combatting the ongoing global crisis caused by the coronavirus. It was a measure aimed at boosting investor confidence in the UK economy. The Chancellor attempted to assuage the public’s rising fears by stating any damage to the UK economy would be temporary.
The outlook for the rest of the week is one of continued volatility, much of which is dominated by the rapidly developing coronavirus situation. All bets are off as to wear the cards will full as much will be dependent on how the pandemic progresses and its duration.
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