Pound Remains Under Pressure Despite Bank of England Rate Cut

The  Sterling pound today had a  muted reaction to  an  emergency rate cut by  the  Bank of  England after the  close of  the  London markets. The  GBP/USD spiked higher briefly before heading lower as  the  greenback posted gains due to  high demand.
The  GBP/USD currency pair today fell to  a  low of  1.1471 before rallying to  a  high of  1.1793 after the  BoE rate cut, then giving up most of  its gains to  trade sideways at  the  time of  writing.
The  currency pair was under pressure from the  start of  today’s session as  investor risk appetite remained at  all-time lows driving the  demand for  the  greenback as  tracked by  the  US Dollar Index. Investors’ skepticism of  the  British government’s efforts to  combat the  coronavirus as  of  yesterday also did not help the  pair. However, the  pair found a  floor at  its daily lows as  buyers stepped in  and  pushed it higher, stopping the  bearish pressure for  the  rest of  the  session. The  announcement of  the  rate cut by  Andrew Bailey, the  new BoE Governor, had a  muted impact on  the  pair as  the  dollar was rallying at  the  time.
Bailey clarified that the  BoE was ready to  do more to  support the  British economy apart from the 15 bps cut. The Governor also announced the expansion of the BoE’s quantitative easing program by   £200 billion to  be used in  purchasing both government and  corporate debt.
The  currency pair’s future performance is likely to  be affected by  geopolitical events and  US dollar dynamics.
The  GBP/USD currency pair was trading at  1.1612 as  at  17:49 GMT, having fallen from a  high of  1.1793. The  GBP/JPY currency pair was trading at  128.07, having dropped from a  high of  129.57.

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