The money will go towards helping local governments and small and mid-sized businesses across America, which has become the epicentre of the global fight against coronavirus. The central bank’s decision to pump trillions into the economy comes as data showed more than 16 million Americans filed claims for unemployment benefits over the past three weeks. Six million workers alone who have been affected by the pandemic submitted applications in the past week.
Pound to euro exchange rate: GBP remains steady amid COVID-19 Pound to euro exchange rate: GBP rises amid coronavirus uncertainty
Businesses across the States have been ordered to close in an attempt to stop the spread of the virus.
A total of 16,366 people in the US have died after contracting coronavirus.
The number of infected stands at 459,699.
The pound, which was already stronger on the day, extended gains to hit a session high of $1.2481.
The pound has hit a three-week high (Image: GETTY)
The Bank of England has slashed interest rates due to the virus crisis (Image: GETTY)
This was up 0.8 percent on the day as risk appetite improved across the board following the dollar’s fall.
Edward Moya, a senior market analyst at OANDA, a foreign exchange company based in New York, said the US currency looks increasingly vulnerable in the midst of the crisis.
He said: “The dollar is looking very vulnerable here in the short-term as the Fed has impressed and this could keep the pressure on the greenback.”
News earlier that the Bank of England has agreed temporarily to lend money to the government to fight the spread of the viral disease if funds cannot immediately be raised from debt markets had little impact on UK bond and currency markets.
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A man wearing a mask walks past the Bank of England (Image: GETTY)
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While the government typically borrows money directly from the markets via bond issuance, its measures to increase spending to protect the economy potentially mean billions of dollars in extra borrowing.
This comes at a time when bond markets have become volatile.
The Bank said any government borrowing from its Ways and Means facility would be repaid by the end of the year.
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Grand Central Terminal is almost deserted amid the lockdown (Image: GETTY)
Andrew Mulliner, a portfolio manager at Janus Henderson Investors, said the Bank’s move would solve the issue of raising a lot of cash quickly via traditional debt management operations through a market that is accustomed to a steady and reliable flow of issuance.
He said: “We see this step as more sensational at a headline level than any significant step into the sort of monetary financing that invites comparisons to Zimbabwe.”
Over the past few days the pound has held firm against the dollar.
The UK’s coronavirus death toll continues to rise (Image: EXPRESS)
But it has failed to break above the $1.25 line.
Recent data released by the Office of National Statistics (ONS) showed gross domestic product rose by 0.1 percent in the December-February period.
The movement was not as good as the 0.2 percent forecast in a survey of economists conducted by Reuters.
Soldiers walk on an almost empty New York street (Image: GETTY)
Versus the euro, the pound struggled to crack through the 87.50 pence level.
While some European nations such as Austria and Denmark prepare plans on how they will come out of lockdowns, the UK’s lockdown is expected to be extended next week.
On a weekly basis, the British currency was poised for a gain of about one percent, aided by a broader drop in currency market volatility.