GBP/USD has been under immense pressure amid dollar strength. The UK’s fiscal and monetary policy is cheered but its ‘herd-immunity’ coronavirus measures are questioned, Yohay Elam from FXStreet reports.
Key quotes
“The UK wants to isolate people over 70 but to let the disease spread. The idea is called ‘herd immunity’ and assumes that if most of the population is infected and become immune, it provides protection for those who are not immune.”
“The Federal Reserve announced a swap mechanism to ease pressure on the greenback with five central banks. That move came on top of another unscheduled rate cut, this time by 100 basis points and all the way to zero. To top it off, the Fed announced a $700 billion Quantitative Easing program.”
“The Fed’s panic move, after a previous rate cut, earlier liquidity injections, and surprise moves from other central banks, somewhat weakened the dollar but failed to alleviate the selling of stocks and the greenback may have room to rise.”
“In the UK, Brexit talks are suspended and seem to belong to the bygone era but the government’s massive fiscal stimulus plan should eventually help the pound stand out.”
Share
