In one of the comparatively more stable sessions we’ve seen of late, a double-hit of ECB/Bank of England stimulus produced something calm-adjacent on Thursday.
Following on from Christine Lagarde’s €750 billion economic package for the Eurozone, Andrew Bailey’s Bank of England slashed interest rates for the 2nd time in as many weeks, all the way to a record low of 0.1%. The BoE also announced it would be buying an extra £200 billion in bonds in order to further try and ease the situation in the UK.
The main beneficiary of this was the pound – which, to be clear, was in desperate need of this temporary escape rope. Lifting away from the sub-$1.15 lows struck earlier in the session – levels last seen in the 1980s – a 1.6% increase pushed cable back across $1.176. Against the euro, meanwhile, sterling was even more eager to recover, jumping 3% to lug itself above €1.093, clawing back most of Wednesday’s losses in the process.
The pound’s surge limited the FTSE’s own rebound, with the UK index only managing a 0.8% increase. In comparison the DAX was up 1.5% and the CAC 1.8%, the French bourse pulling back from its post-open excitement.
As for the Dow Jones, it took baby steps towards recovering Wednesday’s latest quadruple-digit decline, adding just over 300 points to cross 20200.
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