The British pound is higher against the US dollar on Friday.
Sterling was top FX riser on Friday following the news that UK Prime Minister had been transferred out of intensive care to a regular hospital bed after catching COVID-19.
The dollar is setting up for a weekly loss after the Federal Reserve stepped up its lending programs. Each new loan means new dollars being added into the financial system.
GBP/USD was up by 18 pips (+0.14%) to 1.2473 as of 3pm GMT.
The currency pair crept up as high as 1.248 before pulling back. The gains add to the 0.52% return on Thursday and mean a week to date gain of +1.72%.
British pound higher as Boris Johnson leaves ICU
The pound jumped on Thursday evening but managed to hold onto daily gains by Friday in reaction to the news that UK Prime Minister Boris Johnson had been moved out of intensive care. Some researchers have suggested the odds of surviving a trip to the ICU with COVID-19 are about 50/50. The Prime Minister’s recovery offered some relief to traders who had feared a leadership vacuum in Downing Street.
As widely expected, on Thursday Foreign Secretary Dominic Raab extended the UK lockdown. Forex markets have seen the extension of lockdowns as favourable to an uncontrolled outbreak.
Dollar slumps after Fed lending measures
A combination of new lending programs from the Federal Reserve and the USA taking the hot seat for the coronavirus pandemic both weighed on the US dollar this week. On Friday New York State now surpassed any country outside the United States for the number of coronavirus cases.
Flows were minimal on Friday but the dollar continued to ease lower, adding to losses on Thursday when the Fed added to its lending program to small businesses and created a new scheme for governmental entities like municipalities cities and states.
The dollar had surged in March because of a global shortage of dollars when investors liquidated investments in a global sell off. All these Fed measures have increased the supply of dollars available.