Pound Crashes Against Strong US Dollar as Global Equities Crash

The Sterling pound today fell against the US dollar driven by the risk-off market sentiment that dominated global markets amid a major equities sell-off. The GBP/USD extended its losing streak for the third consecutive day and printed new 2020 lows as investors shrugged off the stimulus package announced by the Bank of England yesterday.
The GBP/USD currency pair today fell from an opening high of 1.2849 to a low of 1.2490 in the American session but was off these lows at the time of writing.
The currency pair headed lower today as the US Dollar Index made steady gains throughout the day’s session to hit a high of 98.31, but had retraced some of its profits at the time of writing. Investors sold the pound, ignoring the £30 billion relief program announced by the BoE yesterday to combat the effects of the coronavirus pandemic. The currency pair fell over 2% today as investors sold riskier assets, including the pound in favor of the greenback. The rising coronavirus cases in the UK also did not help the pair as the government advised is citizens to self-quarantine.
Investor expectations that the US FOMC would cut rates a second time this month kept the dollar supported. The release of the weak US producer price index report by the Bureau of Labor Statistics had a muted impact on the pair. The upbeat US initial jobless claims report drove the pair lower.
The currency pair’s future performance is likely to be affected by geopolitical events and tomorrow’s BoE minutes.
The GBP/USD currency pair was trading at 1.2606 as at 20:10 GMT, having fallen from a high of 1.2849. The GBP/JPY currency pair was trading at 132.40, having dropped from a high of 134.23.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *