GBP/USD Picks Up as US Dollar Weakens After Fed’s Latest Stimulus Announcement
On Tuesday, the Pound appears to receive some respite and is recovering against the US dollar after the sharp decline seen in the previous session over heightened uncertainty in markets over coronavirus fears. At the time of writing, GBP/USD is trading at around 1.162.
The worsening sentiment around the coronavirus pandemic, with the global economy looking increasingly likely to slip into recession, has kept currency markets under pressure with investors dumping other major currencies for the relative safety of the US dollar. This has caused GBP/USD to weaken to multi-year lows in recent sessions.
However, GBP/USD has improved slightly after the Fed unveiled one more round of stimulus measures to protect the US economy even as the number of cases continue to climb higher and the US stays in lockdown. The US dollar experienced some weakness as the Trump administration’s fiscal stimulus bill remains stuck in the Senate even as the crisis escalates stateside amid the lockdown.
Even the announcement of stimulus efforts by the British government and the BOE last week failed to prop up the Cable and offer it support as Britain continues to grapple with a rise in the number of infections and death toll. A rush for liquidity and cash have driven trading volumes lower in markets, adding to the woes for this forex pair.
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