The pound is on the front foot against both the dollar and the euro. Sterling is benefiting from the improvement in market sentiment following several announcements of government-led rescue packages and intervention from central banks on an unprecedented scale across the globe. Markets reacted positively to the latest news of a deal being struck between the White House and Congress for an economic aid package of $2 trillion aimed at mitigating the fallout from the coronavirus crisis on the economy of the United States. Risk related assets recorded gains and the pound joined the bandwagon. The question now is, will this risk rally be sustainable or will it be diluted amidst the expected torrent of negative economic performance indicators investors will soon be presented with? Economies across the globe are showing signs of shrinking at unprecedented speeds and that realisation is likely to overshadow any positive sentiment generated by financial rescue packages and intervention.
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