Pound Drops On Virus Worries
March 16 2020 - 3:22AM
RTTF2
The pound declined against its major counterparts in the
European session on Monday, as coordinated stimulus actions by
global central banks failed to ease fears over the impact of the
Covid-19 on economy.
Sentiment deteriorated as the number of Italian COVID-19 cases
surged and the U.S. expanded a travel ban to the U.K. and
Ireland.
The U.K. government is facing growing calls to take more drastic
measures as thirty-five people died after testing positive for
coronavirus in the country.
Markets were also reacting to the shutdown of Europe to contain
the spread of the coronavirus.
In economic releases, U.K. house prices rose to a record in
March, data from property website Rightmove showed.
House prices increased 3.5 percent on a yearly basis to GBP
312,625 in March. This was the highest growth since December 2016.
On a monthly basis, house prices gained 1 percent in March.
The pound declined to more than a 5-month low of 1.2259 against
the greenback from last week's closing value of 1.2277. The pound
is poised to challenge support around the 1.21 mark.
The pound depreciated to 1.1553 against the franc, its lowest
level since August 2011. Should the pound falls further, it is
likely to test support around the 1.15 region.
Data from the Federal Statistical Office showed that
Switzerland's producer and import prices declined in February.
The producer and import prices fell 2.1 percent year-on-year in
February.
The pound touched a 6-1/2-month low of 0.9133 versus the euro,
compared to last week's closing value of 0.9036. The next possible
support for the pound is seen around the 0.92 level.
The pound extended slide to a 6-1/2-month low of 129.80 versus
the yen from last week's closing quote of 132.59. The pound may
locate support around the 128.00 level.
The Bank of Japan enhanced its massive monetary policy easing,
in addition to coordinated measures with other leading central
banks, to tackle the financial market downturn caused by the
concerns over coronavirus outbreak.
The policy board has decided to loosen the monetary policy
through conducting various operations including purchases of
Japanese government bonds and the US dollar funds-supplying
operations.
Looking ahead, New York Fed's empire manufacturing survey for
March and Canada existing home sales for February are due out in
the New York session.
Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Mar 2024 to Apr 2024
Sterling vs Yen (FX:GBPJPY)
Forex Chart
From Apr 2023 to Apr 2024