Pound Climbs Amid Risk Appetite On Fed Stimulus
24 März 2020 - 8:17AM
RTTF2
The pound strengthened against its major counterparts in the
European session on Tuesday, as the Federal Reserve's unlimited
quantitative easing and aggressive asset-buying from the Bank of
Japan boosted risk sentiment.
Italy reported smaller increase in coronavirus cases for the
second day running and the head of Germany's public health
institute said the upward trend in the number of COVID-19 cases was
levelling off, helping investor sentiment recover.
Investor sentiment improved after the U.S. Federal Reserve
announced extensive new measures, including an unlimited expansion
of its asset purchases, to support the world's largest economy
during the coronavirus pandemic.
British Prime Minister Boris Johnson called the virus the
"biggest threat this country has faced for decades" as the country
goes into effective lockdown to deal with the threat of the
pandemic.
Survey results from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK private sector logged
its record decline in business activity in March amid emergency
public health measures to contain the spread of coronavirus.
The flash IHS Markit/Chartered Institute of Procurement &
Supply composite output index fell to a record 37.1 in March from
53.0 in February. The reading was also below the forecast of
45.1.
The pound appreciated to 4-day highs of 1.1784 against the
greenback and 130.24 against the yen, after falling to 1.1476 and
127.73, respectively in early deals. Immediate resistance for the
pound is seen around 1.25 against the greenback and 135.00 against
the yen.
The pound moved up to 0.9221 against the euro and 1.1478 against
the franc, from its early lows of 0.9324 and 1.1335, respectively.
The pound is poised to test resistance around 0.88 against the euro
and 1.25 against the franc.
Looking ahead, U.S. new home sales for February are scheduled
for release in the New York session.
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