Risk of Negative Interest Rates Could Affect The Pound

It was a mixed day for the Pound on Wednesday as it ended the day in a better position against the Euro at 1.1169 but it had lost some ground on the US Dollar, finishing the day at 1.2560. The currency was influenced heavily by the fact that the consumer price index indicated that inflation had dropped to its lowest point in four years. However, the interest rate decision from the Bank of England today could have an impact on how it performs on the foreign exchange market.

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The Euro had a tough time on Wednesday after it was discussed that the EU’s coronavirus recovery fund could be distributed as a grant to those countries that found themselves in a weak fiscal position. This meant that investors had concerns over the pressure this would put on wealthier countries within the Eurozone.

Investors made moves into the US Dollar as they looked for safety following the tensions across Asia. This was caused by concerns relating to the clash between Chinese and Indian soldiers on the Himalayan border. However, investors will also be keeping an eye on the jobless claims report. As figures have been increasing, they will be looking to see if the trend is continuing and that could have an impact on the US Dollar.

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