The Pound is extending its recovery versus the Euro on Friday. The Pound Euro exchange rate rallied over 1% after the Bank of England kept rates on hold and Rishi Sunak unveiled support for the self-employed. GBP/EUR closed the session 1.6% higher at a weekly high €1.1065.
At 06:30 UTC, Pound versus Euro is attempting to push through €1.11, trading 0.3% higher.
Rates On Hold & Lifeline From Sunak
The Pound soared in the previous session as the Bank of England kept interest rates unchanged but warned of long-term damage to the economy. The central bank warned that there are mounting risks of widespread job losses and companies going bust across the UK as the economic cost of coronavirus becomes increasingly more apparent.
The BoE has already cut interest rates to the lowest level in its 325-year history and pumped more that £200 billion into the economy through its bond buying programme. The monetary policy committee also said that they stand ready to respond further should it be necessary. These comments lifted sterling.
Chancellor Rishi Sunak added to measures to support UK workers. Yesterday he announced a multi-billion package of support for up to 3.8 million self employed people suffering from a financial hit from coronavirus.
These announcements come as the number of daily deaths jumped to 113 whist the daily rise in official cases of coronavirus rose by 2100 to almost 12,000 in total. If the UK follows China’s trajectory, the peak will be 5th April with 260 daily deaths.
ECB Gives Itself Powers To Unlimited Debts
The euro edged lower versus the pound in the previous session as investors digested consumer confidence data from Germany, the largest economy in the eurozone and as the European Central Bank broadened its commitment.
Data from GFK Institute showed that consumer confidence looked set to slide in April amid the ongoing coronavirus outbreak. The forward-looking sentiment indicator fell to 2.7 from 8.3 in March. This was well short of the 7.1 expected. The data points to a severe recession as the German economy has come to a complete halt.
The ECB gave itself unprecedented powers to buy unlimited amounts of debt as the coronavirus battle escalates. The central bank has ditched limits on how much of a country’s debt it can buy to stop the eurozone economy crumbling.
Today there is no high impacting eurozone economic data. Investors will continue digesting coronavirus developments.