Return to daily updates Friday March 6th 2020

GBP gains versus a broadly weaker dollar

Headlines

  • GBP gains versus a broadly weaker dollar
  • EURUSD gains as it erases all losses in 2020 vs USD

GBP

  • Sterling gains versus the dollar on Thursday boosted by hopes that a deal between the UK and EU is still possible within the timeframe UK PM wants. It also saw gains of the Bank of England decision not to cut rates in an emergency meeting in a response to coronavirus. As of now, GBPUSD is around the key psychological level of 1.30 and GBPEUR remains lower at 1.1490.

EUR

  • The single currency rallies as the carry trade unwinds and interest rate differential disadvantages it has faced recently evaporate. The euro has now reversed all its earlier losses for the year, rising from below $1.08 a few weeks ago to above $1.12.

USD

  • The dollar remains devastated by this weeks 0.5% basis point rate cut as it continues to struggle against a basket of currencies. The dollars advantage of higher interest rates has now diminished and as such EURUSD has now seen a very large reversal from the three year lows to trade at above 1.13. Markets will be guided by coronavirus news headlines and while the USD remains a safe haven currency, the markets, assisted by a dramastic collapse in U.S government bond yields, is weak.
Amir Mehrad
Market update by Amir Mehrad
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