The pound fell to a five-month low against the euro yesterday as markets tumbled due to coronavirus fears. This morning, sterling has made some recovery against the euro and is weaker against the dollar.
Markets are pricing in a rate cut of nearly 50 basis points from the Bank of England when they meet later this month. The Monetary Policy Committee told the Prime Minister yesterday that they would do “whatever was necessary”, suggesting that a rate cut is likely. So far, sterling’s gains have been underpinned by the BoE’s cautious approach.
The FTSE 100 plunged 8.5% after oil prices crashed because of coronavirus, experiencing its worse day since 2008. The index made some recovery as the day continued, however.
