GBP/USD Hits 6-Month Low Following £300 Billion Announcement
GBP/USD Hits 6-Month Low Following £300 Billion Loan Announcement
The British Pound fell to its lowest level since September 2019, hitting 1.20150 against the US Dollar, but managed to recover above the 1.2100 threshold after a new package was announced by the UK government.
In one of his first moves since becoming Chancellor of the Exchequer, Rishi Sunak announced that the UK government would be giving away £330 billion of loans to businesses, in order for them to offset the income loss from the impacts of the coronavirus. This comes just one week after the March 2020 Budget, which already included a £30 billion package, £12 billion of which was allocated to fighting the economic impact of the coronavirus.
However, the Labour party has criticized the move as not being enough for workers and renters, as it only covers businesses, and does not cover employees who are being laid off and losing their incomes. While Sunak has promised a separate package for workers, he had nothing further to say about it in today’s address.
Workers who are still employed will receive the benefits from the business loans, but those who are laid off, cannot work due to being sick, or who work shifts/gigs will suffer heavily. There is also nothing in terms of easing rent and utilities.
In a news conference yesterday, Prime Minister Boris Johnson urged all UK citizens to avoid all non-essential contact with others, and all non-essential travel. He also advised people to not go to public places such as pubs and restaurants, but stopped short of actually ordering them to close down.
As the number of deaths in the UK are now at 67, with the number of cases rising to 1950. However, the actual number of cases is estimated to be anywhere from 35,000 to 50,000. This is a stark increase from just two days ago, when there were only 35 deaths. These rapid increases have caused the public, concerned that the UK is headed for a similar trajectory as Italy, to criticise the current measures as not being enough.
Italy rapidly became the centre of the worst epidemic in Europe, with over 31,000 confirmed cases, and over 2,500 deaths. The number of cases exploded due to the fact that medical services were unable to handle the large number of initial cases, as well as the fact that a large percentage of Italy’s population are aging.
Citizens are pleading for Britain to do the same as Italy, which quarantined the entire country and closed all shops except for supermarkets and pharmacies, as well as a ban on public gatherings and travel restrictions.
United States Non-Farm Payroll posts 4.8 Million jobs in June, beating analysts’ expectations of a 3 million gain. The unemployment rate also fell to 11.1% in June, forecasted at 12.5%.
Gold Futures broke $1,800 yesterday, reaching a high of $1,804 on the Comex in New York after a surge of new Coronavirus cases alongside inflationary fears.
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