- Huge Economic Stimulus Package Approved
- Confidence Unmoved by Stricter UK Lockdown
- Prince Charles Coronavirus Diagnosis Could Shake GBP
News that the Senate has agreed upon a huge stimulus package to provide some much needed relief to the US economy was greeted positively at the opening of today’s markets. The GBP/USD continues its rebound, surging to 1.19 on release of the news. This is a good start to a busy day for the pair which could see movement on the release of a host of data. These numbers include inflation, and Retail Price Index numbers from the UK as well as Durable Goods Order data from the US.
Package Approval Met With Huge Market Increases
Maintaining context important, and on that front, global markets have been suffering greatly and at multi-year lows during the present crisis. Still the news of Senate approval for the economic measures proposed, brought positive reaction throughout the markets. The Dow Jones posted its biggest one day gain since 1933 and the Great Depression. It was up 11.4%.
Similar numbers were being posted across the world, with the Nikkei in Japan closing 8% higher on the news. Analysts are taking nothing for granted and warning of further bounces ahead, but it is some of the first positive news in weeks, though the US still faces up to the reality of growing virus case numbers across the nation.
Tightening of Lockdown Does Little to Impact GBP
British PM Boris Johnson on Monday moved to further tighten lockdown restrictions in the UK. This is a move that many feel is coming well over time, but still required nonetheless. He instructed the closure of all non-essential businesses, and provided increased powers to police to disperse gatherings among a range of other measures.
This news surprisingly did little to move Sterling from what was already a precarious position. Much of this may have been due to the fact that the market had already “bought the rumor”, and was in position expecting the inevitable news. Still, much of the increasing GBP market today stems from improved trader confidence in the US to move away from the safe haven USD slightly. This is a position which could still certainly change given that the US still seems a long way from flattening the COVID-19 curve.
Prince Charles Virus Diagnosis Could Rock Market
With the markets virtually ignoring much of the data released in recent days and weeks, instead moving largely on sentiment around the COVID-19 spread, news just released could prompt a further weakening in the GBP. Heir to the throne in the UK, Prince Charles, has just been diagnosed with coronavirus. He is said to be displaying only light symptoms, though it is certain to ignite concern for other members of the Royal Family, including the Queen.
It remains to be seen how the GBP forex market will react to this news, but it is certainly another factor which could work to further disrupt the market confidence.
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