LONDON, March 24 — Britain’s pound rallied against the dollar and was on steadier ground versus the euro today, winning a respite from a battering in recent days.
Sterling, along with most currencies, has seen a massive wave of selling against the US dollar, the world’s most liquid currency and the safe haven of choice when confidence evaporates from financial markets.
It has also been hurt by concerns over Britain’s approach to dealing with the coronavirus outbreak, which has seen a more staggered disruption to economic and everyday life than in other countries.
Late yesterday, Prime Minister Boris Johnson ordered Britons to stay at home to halt the spread of coronaries, imposing curbs on everyday life without precedent in peacetime.
The pound was last trading almost 0.9 per cent higher on the day at USUS$1.1660 (RM7.35) — having briefly touched a 35-year low of US$1.1413 last week.
Against the euro, the pound was little changed on the day at 92.91 pence — off last week’s lows of 95 pence.
The March “flash” purchasing managers’ index released at 0930 GMT was in focus for early signs of how the coronavirus outbreak is impacting the economy.
“The British pound is undervalued. We think it has appreciation potential, particularly against the US dollar over our tactical investment horizon, if the UK embarks on a fiscal stimulus package,” UBS Wealth Management said in a note.
“Britain’s large current account deficit has also made sterling vulnerable, while drastically poorer liquidity has exacerbated moves downwards.” — Reuters
