GBP/USD Edges Back to 1.24, EUR/GBP Stable

GBP price, news and analysis:

• The Bank of England has agreed to finance temporarily the extra spending needs of the UK Government because of the coronavirus pandemic, allowing the Treasury to bypass the bond markets.
• Alongside reports that UK Prime Minister Boris Johnson’s health is improving after he contracted Covid-19 and was moved to an intensive care unit, that should give GBP/USD a near-term boost.
• However, official statistics show that the UK economy grew by just 0.1% in the three months to February, before the pandemic hit the economy and prompted predictions of a recession.

GBP/USD edging higher

GBP/USD has been given a modest boost by news that the Bank of England is to finance UK Government spending temporarily in response to the coronavirus pandemic if it is unable to raise funds from the debt markets. In addition, the British Pound has been bolstered by news that UK Prime Minister Boris Johnson, who is in a hospital intensive care unit after contracting Covid-19, is improving and able to sit up.

However, the edge has been taken off Sterling by news that the UK economy expanded by just 0.1% in the three months to February, prior to the spread of the virus, in line with expectations and only just above the previous zero growth. Separate trade data showed the UK’s goods trade deficit increased to nearly £11.5 billion in February, worse than the expected £6 billion.

GBP/USD Price Chart, Five-Minute Timeframe (April 8-9, 2020)

Chart by IG (You can click on it for a larger image)

Elsewhere, the FTSE 100 index of leading London-listed stocks was up by more than 3% in early trading Thursday, while EUR/GBP was little changed as European Union finance ministers prepared to meet again in the hope of making progress towards a €500 billion economic rescue package to counter the spread of Covid-19.

EUR/GBP Price Chart, Five-Minute Timeframe (April 8-9, 2020)

Chart by IG (You can click on it for a larger image)

A Brief History of Major Financial Bubbles, Crises, and Flash-crashes

We look at Sterling regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below