The pound had a fairly challenging day yesterday against the Euro and the Dollar. All of this was down to the way in which the virus was impacting the global economy.
Despite that, Sterling has stabilised this morning although confidence in consumers has diminished in the Eurozone, as it has dropped to its lowest point in six years. Along with this, it is expected that the figures for manufacturing in the UK are likely to dip below 50 today.
The UK brought in tough new measures last night, and they are to be put in place for three weeks. Central banks are also looking for additional action as a way of easing the crisis as the Federal Reserve has released a new lending facility. This is designed to help mutual funds while ECB policymakers are putting pressure on EU national governments to come up with a sufficient response.
So, yesterday, investors took up currencies that offered some form of safety such as Greenback, leaving the pound volatile against the Euro and Dollar. Despite this, sterling has shown some resilience this morning against the dollar. The Euro didn’t perform very well against the pound yesterday either. However, there are fears that the economy in Europe could be hit further as the lockdown in France is likely to be extended. Despite this, Italy showed promising signs as infections are starting slow. Where the dollar is concerned, it was weaker this morning after the Federal Reserve took the unusual move to backstop debt while bringing in quantitative easing as a way of reducing the impact that Covid-19 is having.