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Pound Rises on Stricter Lockdown Measures; Dollar Drops on Unlimited QE

Tuesday,   24-Mar-2020   10:51 AM (IST)

The pound rebounded on Tuesday following reports that U.K. Prime Minister Boris imposed stricter lockdown measures to combat the COVID-19 pandemic. The GBP/USD pair was up 0.8% to 1.1636 by 12:10 AM ET (04:10 GMT) after falling to as low as 1.1448 on Monday. Boris said the government would offer support and impose restrictions, including limiting gathering of more than two people in public, for at least three weeks. Meanwhile, the U.S dollar continued its fall for a third straight day on Tuesday after the U.S. Federal Reserve supplied a much-needed greenback liquidity. The U.S. dollar index, which tracks the greenback against a basket of other currencies, slid 0.84% to 102.390. Overnight, the Fed announced unlimited quantitative easing and programs to support credit markets. It also released other measures, including maintaining credit flow for business and a first dabble into corporate bonds. The Fed's unlimited easing could continue to ease stress in the credit markets, leading to further weakness in the dollar. The AUD/USD pair gained 1.78% to 0.5932 as Australia’s Parliament passed an A$80 billion ($46.24 billion) stimulus package yesterday at a special sitting. The NZD/USD pair gained 1.21% to 0.5785 as the country prepares to go into a government-mandated lockdown. The USD/JPY pair was down 0.7% to 110.43 as the IOC debates whether to delay the Tokyo Olympic games, with a decision to be made within this week. The USD/CNY pair lost 0.03% to 7.0878. The GBP/USD pair gained 0.58% to 1.1615 as Prime Minister Boris Johnson announced stricter new regulations to prevent the spread of COVID-19 today.