RationalFX : Sterling skidded against the dollar yesterday as the US dollar reasserted its safe haven status and Britain’s economic outlook was knocked further by a credit ratings downgrade………
Sterling rose nearly 7% last week against the greenback as measures to inject liquidity into markets by the US Federal Reserve and a $2trillion stimulus bill to offset the economic effects of the coronavirus pandemic cooled dollar demand.
Ratings agency Fitch cut Britain’s sovereign debt rating on Friday, saying debt levels would jump as it ramped up spending to offset a near shutdown of the economy. Facing what some analysts say could be Britain’s deepest recession in a century after the government ordered many businesses to close, Finance Minister Rishi Sunak announced a string of stimulus measures to try to curb unemployment. A poll showed that one in five Britons fear an economic depression because of the impact of coronavirus and a further 52% expect the economy to be in recession within a year.
Source : ETFWorld.co.uk