The pound is weaker against both the euro and the dollar this morning, after hitting a three-month high against the greenback earlier in the week. This is possibly due to a drop in the stock markets after the Federal Reserve presented their latest thoughts on interest rates and the economy yesterday evening.
On Tuesday, Bank of England Deputy Governor, Jon Cunliffe, said that the COVID-19 crisis is “far from over” for the financial sector. The MPC member said that the initial shock of adjusting to a new economic outlook has passed. However, he added, “The depth and length of its economic impact remain very uncertain: it is clear that there is likely to be a great deal of pain for the financial sector.”
With non-essential businesses opening from next week, however, there is some optimism that the economy will pick up. Despite this, Britain’s large coronavirus death toll, which passed 50,000 this week, is also putting pressure on sterling.
