The United States dollar has continued to hammer major currencies, rising to the highest level against the UK pound in more than 30 years this week.
According to Bloomberg, the Federal Reserve Bank has set dollar swap lines with multiple central banks around the globe to ensure “US dollar liquidity in amounts up to $60 billion.”
As at 09.27 GMT, the euro fell 0.73% against the dollar while the pound was flat against the dollar at the same time, trading for 1.16196. The dollar also surged 1.45% to sell for ¥109.6530, the highest level since late February.
“A lot of the weakness is emanating from the stronger US dollar demand. As the Covid-19 theme develops and continues to deteriorate market sentiment, the dollar will continue to flourish as a safe haven.” According to Gaurav Kashyap, a market strategist at Equiti Global Markets.
In its second emergency rate cut in less than 10 days, the Bank of England on Thursday voted reduced its bank rate by 15 basis points to 0.1%, its lowest rate ever, at a special meeting over the impact from the Covid19 pandemic.
In a statement, the policymakers also voted to ramp up BOE’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to £645 billion.