The pound was bolstered by a widespread market recovery that saw stocks surge and bond yields rise on hopes that United States was on the verge of agreeing a coronavirus relief package.
Gains in the euro were capped by dire economic data that imply the Eurozone economy is likely already in a recession.
Pound versus euro was higher by 143 pips (+1.33%) to 1.0907 with a daily range of 1.0724 to 1.0928 as of 4pm GMT.
The currency pair rebounded from yesterday’s low under 1.07 to take out 1.09 on the topside, taking it mildly positive for the week by +0.18%.
British pound rises with its data relatively less bad than in Europe
Survey data from purchasing managers painted a pretty bleak picture for the UK economy on Wednesday. The Markit Flash Composite PMI for March showed a reading of 37.1 -a collapse from the 53.0 reported in February and a new record low. The composite reading gives a combined reading for the services and manufacturing sectors. A reading above 50 signifies expansion while a reading below 50 shows a contraction.
The purchasing managers surveyed gave their answers before the government introduced more severe measures to prevent the spread of the coronavirus.
Euro under pressure as PMI data collapses, Spain death toll rises
While the numbers in the UK were bad, they were in many cases even worse in mainland Europe. The UK data was the best of a bad bunch, giving the pound a relative boost against the euro.
In France the equivalent March PMI data crumbled to 30.2, down from 52 in February, while in Germany it was 37.2, down from 50.7.
The spread of the coronavirus has taken hold quicker in mainland Europe so the readings are worse but British scientists seem to think this is only a lag, and the UK could soon find itself in equally difficult circumstances.
A spike in the COVID-19 death toll in Spain to 514 in 24 hours added to the anxiety in FX markets.