SendMoney.org.uk

Compare exchange rates, send money abroad and online

Sat 31 Oct 2020 21:58GMT

Pound (GBP) Rises Despite BoE Talk of Negative Interest Rates

Published: 12 Oct at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound (GBP)


The Pound (GBP) edged higher today after Prime Minister Boris Johnson revealed a new three-tier system to curb the spread of Covid-19.

Mr Johnson said:

‘We want to create the maximum possible local consensus behind this more severe local action, so in each area, we will work with local government leaders on the additional measures which should be taken. This could lead to further restrictions on the hospitality, leisure, entertainment or personal care sectors. But retail, schools and universities will remain open.’

However, GBP investors heaved a sigh of relief, with only a relatively small part of the UK hit by the tier-two and tier-three restrictions.

Nonetheless, these could quickly change, compromising Sterling’s gains in the months ahead.

Meanwhile, the Bank of England (BoE) dropped hints of negative interest rates, asking banks how well prepared they were for the possible event of rates going into negative territory.

Euro (EUR)


The Euro (EUR) remained subdued today as concerns over Europe’s rising Covid-19 infection rate has dampened confidence in the Eurozone’s economic recovery.

In Eurozone economic data, today saw the release of Germany’s Wholesale Price Index for September, which failed to impress, despite rising from -0.4% to 0%.

US Dollar (USD)


The US Dollar (USD) underperformed today as the growing likelihood of a Democrat Joe Biden win in next month’s election has compromised demand for the safe-haven ‘Greenback’.

However, USD investors are focusing on US Covid-19 stimulus news, with doubts growing over whether the Democrats will now accept Trump’s stimulus proposal.

White House press secretary, Kayleigh McEnany, told Fox News:

‘I believe Senate Republicans will ultimately come along with what the president wants - the president noted that yesterday. We believe Senate Republicans are not what’s blocking this. It is Democrats.’

Canadian Dollar (CAD)


The Canadian Dollar (CAD) has continued to be bolstered by positive Canadian economic data following a larger-than-expected fall in Canadian unemployment in September.

Overall, the ‘Loonie’ has been bolstered by growing optimism in Canada’s economic performance, which appears to be shrugging off some of the pressures from Covid-19.

Australian Dollar (AUD)


The Australian Dollar (AUD) performed badly today after US House Speaker Nancy Pelosi dashed hopes of a US Covid-19 stimulus packaged after calling President Donald Trump’s stimulus efforts as being ‘insufficient’.

As a result, investors have become cautious around the risk-averse ‘Aussie as US political developments continue to eclipse hopes of an American stimulus package.

New Zealand Dollar (NZD)


The New Zealand Dollar (NZD) remained subdued today on risk-off trade as rising global cases of Covid-19 weighed on the risk-averse ‘Kiwi’.

Instead, NZD investors are focusing on New Zealand’s general election which is due to take place next weekend.

Any further political uncertainty would also weigh on NZD.

As of Monday, 12th October 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1059, GBP USD exchange rate was 1.3066, GBP AUD exchange rate was 1.8127, GBP NZD exchange rate was 1.9652, and GBP CAD exchange rate was 1.7133.
Dominic Lee About Author: (438 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

Live Exchange Rates