The British pound is flat against the euro on Tuesday as Spain introduces a big new stimulus program to combat the coronavirus pandemic and with the UK Chancellor of the Exchequer set to update the British public in a press conference today on a new set of financial measures for the UK.
Pound versus Euro was down by 2 pips (-0.06%) to 1.0960with a daily range of 1.0947 to 1.1032 of 3pm GMT.
GBP/EUR traded in a 50 pip sideways range above and below the 1.10 level on Tuesday after falling -0.24% on Monday.
British pound rises before possible new measures by Sunak
There has been no great uplift in the pound ahead of the scheduled announcement from the UK Chancellor since other European counties, including Spain look to take similar measures. Chancellor Rishi Sunak had already delivered a big spending boost in the March UK budget so expectations are for more specifics about how the government will look to support British workers and businesses. Sunak will join the daily press conference with Prime Minister Boris Johnson.
Last week the Bank of England cut interest rates at the same time of the budget, so traders have half an eye on Threadneedle Street and another possible emergency rate cut. New BOE Governor Andrew Bailey gave big hints the central bank would begin new easing measures in comments on his first day on the job.
Euro edges higher as Spain pledges €200 billion stimulus
There was more evidence of European national governments stepping up to the plate on Tuesday. The more governments do to sure up the economy against the coronavirus with fiscal spending, the better the euro stands to do relative to other currencies. After the 2008 financial crisis the EU was criticised for doing too little, it would things are changing.
Alongside near total lockdown in the movement of the Spanish public to contain the outbreak, the Madrid government has unleashed a massive 200 billion euro stimulus program. The package includes the suspension of mortgage payments for those affected by the outbreak, 600M to protect the elderly and vulnerable, 100 billion in state-backed guarantees and ‘unlimited’ liquidity for companies.
