Return to Currency News Friday February 14th 2020

UK chancellor resigns


  • UK chancellor resigns, pound rallies on hopes of expansionary budget
  • Euro falls once more
  • USD bought on coronavirus fears


  • The Pound rallied on Thursday to new recent highs versus the Euro as markets took the view that a new Chancellor would unveil a more expansionary budget. While growth remains weak, the expansion of fiscal spending  may help weather the storm as Britain leaves the EU. 
  • Expectations for a rate cut from the Bank of England before the end of 2021 have all but evaporated – money markets are now pricing in a full 25 basis point cut not before December 2021. The pound rose marginally on Friday to $1.3048, retaining most of its gains from Thursday’s move. It had traded below $1.30 before news broke of Sunak’s appointment. Against the euro the pound rose 0.1% to 82.995, close to a two-month high. Attention next week will turn back to the health of the UK economy, with employment, inflation and retails sales numbers all due.


  • (Reuters) – The euro fell again to a nearly three-year low on Friday amid worries about slowing growth in the euro zone, as fourth-quarter data confirmed the economy’s sluggish performance. The euro has lost close to 1% so far this week and is on track for its worst two-week performance since mid-2018. Euro zone gross domestic product grew 0.1% quarter-on-quarter in the fourth quarter, in line with forecasts. Year-on-year growth was weaker than expected, at 0.9%, although employment grew more than expected.
  • The euro fell to $1.0827 overnight before settling at $1.0841, down on the day. It was unchanged after the euro zone data was released.


  • Risk-off returned to financial markets this Thursday, amid renewed concerns related to the coronavirus outbreak after roughly 15,000 new cases and over 240 deaths were reported as of February 12, bringing the death toll to over 1,350. The USD continues to hold firm as markets look to take the greenback in as a safe haven currency.
Amir Mehrad
Market update by Amir Mehrad

14 years experience in deliverable foreign exchange, over 7 as CEO of Effective FX

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