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GBP/USD is battling 1.22 as the dollar gains amid financial distress related to the coronavirus outbreak. Fiscal stimulus from both sides of the Atlantic is eyed, Yohay Elam from FXStreet informs.

Key quotes

“Prime Minister Boris Johnson has changed his tack on battling coronavirus and now calls to avoid gatherings and work from home when possible.” 

“The new policy is set to inflict considerable economic damage that is hurting the pound. Chancellor of the Exchequer Rishi Sunak is preparing another aid package, to be presented as early as Tuesday.”

“Democrats are working toward a gargantuan $750 billion package with Republicans in Congress and the White House. The bigger the package, the larger the relief for the world, and the worse for the dollar.”

“The UK reported an increase in the unemployment rate from 3.8% to 3.9% in January, while wage growth excluding bonuses decelerated from 3.2% to 3.1%. Nevertheless, this development predates the health crisis and had no immediate impact on the pound.”

“Later in the day, US Retail Sales figures for February may see the same fate – minimal impact.”