GBP/USD: Surging amid a broad market correction

GBP/USD is surging some 400-pips off the lows amid a better market mood. Yohay Elam, an analyst at FXStreet, looks at the cable’s outlook.

Key quotes

“A broad market correction, where all assets are rising against the US dollar, is the reason for the surge in GBP/USD.” 

“Sterling is benefiting from monetary stimulus. The BOE announced a rate cut to 0.10% and another £200 billion in new bond-buying, an increase of nearly 50%.” 

“Chancellor of the Exchequer Rishi Sunak is scheduled to present additional steps to support struggling businesses and workers later in the day. The bigger the help, the higher the pound can rise.”

“Concerns about a downturn in the US have risen after jobless claims increased to 281,000 and as California ordered people to stay at home. Some fear a substantial slump.”