Sterling dips as coronavirus fears rattle nerves, boost euro - REUTERS

FEBRUARY 28, 2020

LONDON (Reuters) - The pound dropped on Friday, particularly against the euro, as worries about the fast-spreading coronavirus sent investors out of currencies deemed riskier.

With the biggest moves in the safe-haven Japanese yen, Swiss franc and in euro/dollar, where a sudden drop in U.S. interest rate cut expectations have whacked the greenback, sterling has been somewhat of a sideshow in markets this week.

Still, the pound has lost 2.5% versus the dollar this month and almost 2% against the euro as investors fret about Britain’s negotiations with the European Union over a trade deal and whether a UK budget next week will include much more spending, which many investors say is necessary to boost economic growth.

Graphic: Trade-weighted sterling since Brexit vote - here

The broad slump in risk appetite caused by the coronavirus spread has not helped the pound, either.

“While country-by-country tallies of COVID-19 shows an un-alarming total of 15 in the UK, its near 5% current account deficit means a tightening of financial market conditions leaves currencies like the pound vulnerable to the downside,” MUFG analysts said in a note.

Sterling traded at $1.2880 in early Friday trading, slightly lower on the day, while it lost 0.4% against the euro at 85.70 pence - its weakest since mid-January.

Graphic: World forex rates in 2020 - here

Reporting by Tommy Reggiori Wilkes; Editing by Hugh Lawson


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics