16.03.2020 GBP/USD Daily Analysis

16.03.2020 GBP/USD Daily Analysis

This weekend in a dramatic act, the Federal Reserve cut interest to nearly 0% ( range between 0%-0.25%). "This is an indication that the central bank is very scared about the environment we’re in, the policy response is so strong, it’s likely to spook investors.” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. So far coronavirus has affected 159 000 people globally and more than 5 800 fatalities. The Fed`s move was an attempt to manage the impact of the coronavirus on the economy as investors fear a repeat of the financial crisis in 2008. This move comes after US President Donald Trump kept pressuring the Fed to cut interests even more after the initial 50 base point cut a few weeks ago. President Trump referred to this move as terrific and very good news. “This action in itself is not going to rescue the US economy from recession, but it will help to mitigate the risks from financial tensions that could make the growth and jobs outlook far, far worse,” said James Knightly, Chief International Economist at ING. The USD was largely affected by this move as markets opened. The US Dollar Index went down by 0.7% after this announcement. Tomorrow there is US Retail Sales measure the change in the total value of sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. Another event tomorrow is the UK Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month.