The British pound is lower against the US dollar on Wednesday.
US President Donald Trump saying that the United States could see up to 240,000 dead from the coronavirus and a “a hell of a bad two weeks” is adding to souring sentiment in FX markets that’s given havens like the dollar a bid.
The pound was rising against most currencies but couldn’t defy the haven flows into King Dollar, where it saw relatively small losses.
GBP/USD was down by 27 pips (-0.22%) to 1.2402 with a daily range of 1.2330 to 1.2443 as of 4pm GMT.
The currency pair stalled near yesterday’s peak around 1.245 and fell back beneath 1.24. The big 1.25 round number has been resistance over the past 3 days.
British pound outperforms in bullish dollar day
Having been one of the biggest losers to the dollar liquidity crunch in March, Sterling has been off to the races ever since new measures from the Federal Reserve eased the situation. Whatever you attribute it to, be it Brexit or other fragilities – the pound lost the most against the dollar when it was surging in early March so naturally it is bouncing back the strongest.
That bounce has lost some momentum in the past two days as traders grapple with the big 1.25 handle in GBP/USD.
Dollar rallies as Trump predicts “a hell of a bad two weeks”
Comments from the President as well as Treasury Secretary Mnuchin were driving the short term action. Trump said “This is going to be a very bad two, and maybe three weeks. This is going to be three weeks like we’ve never seen before.” It’s a notable shift in tone from the US President who up to now had been talking ill of lockdown measures that harm the economy.
Treasury Secretary made a number of comments on an interview on CNBC. The major announcement was that the US has launched its small business lending program worth $350 billion. He was quick to say he would be headed back to Congress if the 350 was not enough and said that there will be more stimulus bills. An official White House spokesperson said there are no discussions now about a phase four stimulus bill.
