SendMoney.org.uk

Compare exchange rates, send money abroad and online

Mon 13 Jul 2020 04:57GMT

The Pound (GBP) Suffers as Bank of England Ramps Up Stimulus Measures

Published: 18 Jun at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China,

Pound (GBP)


The Pound (GBP) fell against most major currencies today after the Bank of England (BoE) announced a further £100 billion addition to its quantitative easing programme. As a result, this left many investors feeling concerned for Britain’s economic recovery.

The BoE was also downbeat in its statement:

‘There is a risk of higher and more persistent unemployment in the United Kingdom. Even with the relaxation of some Covid-related restrictions on economic activity, a degree of precautionary behaviour by households and businesses is likely to persist. The economy, and especially the labour market, will therefore take some time to recover towards its previous path.’

Post-Brexit concerns have also weighed down Sterling, with rising doubts whether the UK will be able to secure a workable trade agreement with the European Union ahead of the December deadline.

Euro (EUR)


The Euro (EUR) held steady throughout much of today despite growing fears over the Eurozone’s economy’s ability to rebound later in the year.

EUR also suffered after the European Central Bank’s President, Christine Lagarde, said that the bank was now working in accordance with the central bank’s worst-case-scenario forecasts.

Yesterday also saw the bloc’s inflation figures fall to four-year lows, leaving many single currency investors concerned that the Eurozone’s economic recovery could be much slower than previously expected.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, commented:

‘Details suggest that inflation in personal care services, such as hairdressing, and in some restaurants and other hospitality services rose as lockdowns were lifted, but it’s too early to see whether this will be sustained.’

US Dollar (USD)


The US Dollar (USD) has continued to benefit from dampened risk sentiment today as coronavirus cases increase across many American states and in Beijing, leaving investors concerned that the global economy could take another hit from a second wave of the virus.

Today also saw the US initial jobless claims for June increase above forecasts to 1,508 thousand. As a result, investors have flocked to safe-haven currencies as America’s economy – the largest in the world – continues to struggle from the coronavirus pandemic.

Canadian Dollar (CAD)


The Canadian Dollar (CAD) has benefited from increasing oil prices today, with recent data from America increasing the likelihood of an OPEC meeting addressing oil output quotas. With Canada’s economy reliant on oil exports, this has boosted the oil-sensitive ‘Loonie'.

Louise Dickson, oil markets analyst at Rystad Energy, however warned:

‘The meeting of course can also go sideways. Members that are not fully complying with their production cut quota are always a sticky point for the big guns of the alliance.’

Australian Dollar (AUD)


The Australian Dollar (AUD) edged higher today despite Australian unemployment rose to 7.1%.

Nevertheless, with hopes growing over US-China trade relations improvement, this boosted the risk-averse ‘Aussie’. China is Australia’s largest trading partner, and any improvement of relations between the US and China proves AUD-positive.

New Zealand Dollar (NZD)


The New Zealand Dollar (NZD) held steady today with fears growing over the prospect of a second wave of coronavirus cases wracking the global economy.

Martin Rudings, an adviser at OMF, commented:

‘The market is concerned about the rise in Covid numbers – I think that's what stopped the equities markets from rising.’



As of Thursday, 18th June 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1088, GBP USD exchange rate was 1.2428, GBP AUD exchange rate was 1.8126, GBP NZD exchange rate was 1.9323, GBP CAD exchange rate was 1.6897, and GBP CNY exchange rate was 8.811.
Dominic Lee About Author: (421 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