11.03.2020 EUR / GBP Daily Analysis

11.03.2020 EUR / GBP Daily Analysis

The Bank of England has announced an emergency cut in interest rates to shore up the economy in the wake of the coronavirus outbreak, with markets judging that the effort forms part of a unified response between the Bank and government. The Monetary Policy Committee cut the basic interest rate from 0.75% to 0.25%, taking borrowing costs back down to the lowest level in history. In a press conference following the decision, outgoing Governor Mark Carney says the Bank stands ready to act again to deliver further support if need be. Incoming Governor Andrew Bailey told reporters that the Bank today used about 50% of the arsenal it had at its disposal, adding that the March 26 meeting will see business conducted as normal. However, The Pound-to-Euro exchange rate has declined in value since late February when a sharp sell-off in global stock markets saw billions of euros worth of investments return home to the Eurozone. Further support for the Euro came as thousands of contracts betting against the Euro began to unwind, with traders having to close out bets which boosted demand for the single currency further.