RationalFX : The pound fell sharply again on Friday, losing nearly 1% against the euro and dollar as worries about the fast-spreading coronavirus sent investors out of currencies deemed riskier………
As investors rushed for the safe-haven Japanese yen, Swiss franc and US dollar, sterling fell to its lowest against the dollar since October. Whilst there was no sterling-specific news on Friday, Britain’s finances had left it vulnerable – its large current account deficit means the country depends on overseas investment.
Traders are now raising their bets of an interest rate cut by the US Federal Reserve this month to shield the economy from the rapid spread of the coronavirus. Federal Reserve Chair Jerome Powell said on Friday the central bank will ‘act as appropriate’ to support the economy in the face of risks posed by the coronavirus epidemic. Investors took his comments as a hint that the Fed will cut interest rates by at least 0.25 percentage point at its next scheduled meeting on 17th-18th March.
There is even increasing chatter of an unscheduled move, with some economists saying a coordinated global interest rate cut by the top central banks could happen as early as on Wednesday. The expectations around the Fed underscored the speed and scale of the virus’ spread from China through to dozens of countries and the potentially crippling blow to the global economy.
15:00 – USD – ISM Manufacturing PMI forecast at 50.5.
Source : ETFWorld.co.uk