As the Bank of England (BoE) made the second round of emergency cuts to interest rates, it resulted in the strengthening of the pound against both the euro and dollar. Quantitative easing also helped the situation, showing encouraging signs for international payments. The world of currency has seen a significant shift in recent weeks but due to the announcement from the BoE, the foreign exchange rate experienced a slight rebound as a result. Despite this, sterling is still some way short of where it was before COVID-19.
However, as the markets began to stabilise last week, it resulted in those currencies that are considered a safe bet such as the US dollar to become weaker. Following the closure of many establishments, including restaurants, pubs, clubs and cinemas by Boris Johnson, there is even more uncertainty about the markets as a whole.
During this week, the official meeting of the BoE will take place with all decisions being announced on Thursday. As the rate currently stands at 0.1%, it is unlikely that any further cuts will be made. Along with this, the BoE will also abandon their stress tests this year while it looks as though it is going to be a relatively busy week for UK data as inflation rate data will be released on Wednesday as well as the retail sales figures which will be released on Thursday.
Today’s key announcements:
- EUR G20 Meeting
- USD Senate votes on Coronavirus Bill