The Pound Sterling moved higher during Wednesday trade in London with bargain hunters giving it a buy given its cheap price after it struck a 2-week trough on Tuesday. While Sterling remains slightly above the lows it hit last month, analysts caution that it remains a risky bet given its correlation to higher risk assets and to equities which did see a move higher in futures today. The Pound is also getting a lift from the latest data which showed that consumer inflation fell last month to 1.5% (year over year), largely in line with analysts forecasts. The producer price index (input) was also not as bad as analysts had predicted at -2.9% against calls for a decline to -3.6. The retail price index for March showed a decline of 0.2% from 0.5%, but better than the -0.2% that had been forecast.
As of 11:14 am in London, the GBP/USD was trading higher at $1.2353, up 0.4554% and off the earlier peak of $1.23695. The EUR/GBP was trading at 0.8791 Pence, a loss of 0.3976%; the pair has ranged from 0.87790 Pence to 0.88473 Pence in today's session.
Analysts say that the concern over the coronavirus are also likely to continue to weigh on Sterling as new issues arise. The latest showed that another 828 Britons had died in the 24-hour period through to Tuesday according to the UK Ministry of Health, bringing the total to 17,337. The government has been chastised for a lack of personal protective equipment and for not participating in an an EU plan to purchase equipment and ventilators. The lack of PPE has resulted in medical staffers being forced to reuse worn equipment; it was reported earlier that the UK military has brought much needed equipment from Turkey to help meet the growing need.