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The U.S. dollar fell against the euro for the third straight day on Thursday as the common currency continued to bask in the glow of the recently announced 750 billion-euro ($828.90 billion) coronavirus recovery fund amid improved risk appetite, leading investors to favor riskier assets.

The euro was 0.49% higher against the greenback at 1.1057. The single currency has risen 1.5% over the past three sessions.

The EU executive unveiled a plan on Wednesday to support economies hammered by the pandemic, hoping to end months of squabbling over how to fund a recovery.

The euro’s price action continues to be driven by global risk sentiment, even as market participants remain deeply skeptical that the EU recovery fund proposal will navigate the bureaucracy unscathed, said Simon Harvey, FX analyst at Monex Europe.

“We expect EURUSD volatility to remain well supported in the coming months,” Harvey said.

Overnight implied volatility gauges inched up to hit a one-month high above 8%, suggesting investors were prepared for unexpected moves in the common currency.

The dollar, which usually draws safe-haven flows in times of economic uncertainty, found little support on Thursday after the Labor Department reported another 2.1 million people filed for unemployment benefits in the week ended May 23, down 323,000 from the prior week.

“It’s still an extremely large number, but if the number of people continuing to file for unemployment benefits is decreasing then this should be viewed as a positive for the economy,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

The U.S. Dollar Currency Index, which measures the greenback’s strength against six other major currencies, was down 0.36% at 98.555, its weakest in nearly two months.

The pound recovered partially from the previous session’s sharp drop against the dollar after Wednesday’s reports that Brexit talks are at an impasse.

The dollar edged higher on Wednesday as worries about the U.S. response to China’s proposed security law for Hong Kong supported safe-haven demand for the greenback.

The yuan fell to the lowest in more than eight months after a media report that Beijing planned to expand the scope of its security legislation, which is likely to increase concerns about civil liberties in the former British colony.

The euro held gains against the dollar and the pound but faces a severe test when the European Commission is expected to release details of a financial rescue fund for the bloc later on Wednesday.

Financial markets have been caught in a tug-of-war between optimism and pessimism about the global outlook.

Some investors are betting on a resumption of business activity following the crippling coronavirus pandemic that brought the global economy to a standstill, but others worry the threat of U.S. sanctions against China for its treatment of Hong Kong could easily worsen risk sentiment yet again.

“We are in a broad risk-on trend, but the only thing that can change this is the U.S.-China relationship,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“More problems between these two countries would slow the dollar’s recent decline and potentially lead to dollar buying as a safe haven.”

The dollar edged up to $1.2322 against the pound on Wednesday in Asia, pulling away from its lowest level in two weeks.

The dollar rose to $1.0961 per euro, also pulling away from a one-week low.

It bought 0.9665 Swiss franc in Asia, following a 0.6% loss in the previous session.

The Australian dollar fell 0.17% to $0.6645, while the New Zealand dollar eased to $0.6191 as worries about U.S.-China tensions hurt demand for riskier assets.

The Aussie and the kiwi are often traded as liquid proxies for risk because of their close ties to China’s economy and global commodities.

The dollar remained locked in a narrow range at 107.49 yen, but the yen rose against the euro and the antipodean currencies on increased safe-haven demand.

Many of the places that were hardest hit by the coronavirus pandemic are now allowing more businesses to resume normal operations, leading to an unwinding of safe-haven bets on Tuesday.

However, the move faded on Wednesday as Asian stocks and U.S. Treasury yields fell, showing risk aversion remains.

U.S. President Donald Trump said on Tuesday the United States will announce before the end of the week its response to China’s planned security bill for Hong Kong.

Trump’s administration is considering sanctions on Chinese officials, Bloomberg News reported.

Onshore, the yuan fell to 7.1591 per dollar, the lowest since September 2019.

Beijing has expanded the scope of the draft national security legislation to include organisations as well as individuals, media reported on Wednesday.

The United States and China have repeatedly clashed over trade policy, advanced technology, and China’s response to the coronavirus, which originated in the central province of Hubei late last year.

Another row between the world’s two superpowers over civil liberties in Hong Kong could prompt a return to risk-off trades that favor dollar gains, declining equities, and rising bond prices.

Further gains in the euro depend on whether policymakers can narrow their differences on how to fund an economic rescue package for the euro zone, traders say.

France and Germany have proposed a 500 billion euro coronavirus recovery fund that would issue grants to help the bloc’s economic recovery from the coronavirus pandemic.

Austria, Sweden, Denmark, and the Netherlands have opposed this plan, calling instead for a loans-based approach.

The European Commission is to present its own proposal for a recovery fund later on Wednesday, which could determine the near-term direction of the euro.

The dollar edged higher on Monday as worries about a standoff between the United States and China over civil liberties in Hong Kong fuelled demand for safe-haven currencies.

The yuan and the Australian and New Zealand dollars fell as risk-aversion hit foreign exchange markets.

Sterling was on the defensive after members of British Prime Minister Boris Johnson’s party called for the resignation of an influential aide for breaking travel restrictions during the coronavirus lockdown.

A senior White House official has said Beijing’s plan to impose a security law on the former British colony of Hong Kong could lead to U.S. sanctions, which could worsen an already tense relationship between the world’s two-largest economies.

“The biggest concern is the tension between the United States and China,” said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo.

“Things were already bad, and it is likely to get worse because of the Hong Kong security law. This supports risk-off trades, which is positive for the dollar and the yen.”

The dollar edged up to $1.0887 against the euro on Monday, close to its strongest in a week.

The dollar bought 0.9729 Swiss franc, also close to a one-week high.

The greenback held steady at 107.72 yen.

In onshore trade, the yuan eased slightly to 7.1422 per dollar, approaching the lowest in more than seven months.

Trading may be subdued on Monday with financial markets in Singapore, Britain and the United States closed for public holidays.

China’s proposed national security legislation for Hong Kong could lead to U.S. sanctions and threaten the city’s status as a financial hub, White House National Security Adviser Robert O’Brien said on Sunday.

Hong Kong police fired tear gas and water cannons to disperse thousands of people who rallied on Sunday to protest Beijing’s national security law.

Washington and Beijing are also at loggerheads over Chinese companies’ access to advanced technology and criticism of China’s response after the novel coronavirus emerged late last year in Hubei.

The threat of sanctions over Hong Kong risks a repeat of last year’s damaging trade war between the United States and China.

The British pound was little changed at $1.2175. Against the euro, sterling traded at 89.46 pence.

Johnson backed senior adviser Dominic Cummings on Sunday, despite calls from within his Conservative Party for the aide to resign.

Cummings, the architect of the 2016 campaign to leave the EU and widely considered to be Johnson’s most influential strategist, came under pressure after reports he traveled to northern England from London during a nationwide lockdown in March when his wife was ill with COVID-19 symptoms.

The Australian dollar gave up early gains to trade at $0.6528 as risk aversion offset optimism about the country’s emergence from coronavirus lockdowns.

In New South Wales state, which includes the city of Sydney, children returned to school full-time on Monday, allowing many parents to work from their offices.

Australian states are pressing ahead with a three-stage plan to remove most social restrictions imposed by July.

Across the Tasman Sea, the New Zealand dollar drifted lower to $0.6093.

The dollar gained against major peers on Friday as worries about rising diplomatic tensions between the United States and China supported safe-haven demand for the greenback.

Sino-U.S. relations have soured over a broad range of issues, including China’s treatment of the former British colony of Hong Kong and its response to the coronavirus pandemic, which is causing risk aversion to spread.

The fresh geopolitical strains also boosted the safe-haven yen but sent the yuan to a 1-1/2 month low and rattled both the Australian and New Zealand dollars.

“There have been problems between the United States and China for quite a while now,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.

“Some very short-term players are changing positions from one day to the next, which makes it difficult to see the trend, but overall the dollar looks to be supported.”

While the new frictions added some pressures to the yuan, the Chinese currency also found some support after policymakers in Beijing unveiled new stimulus measures, as widely expected.

The dollar rose 0.24% to $1.0925 per euro on Friday, following a 0.3% increase in the previous session.

The dollar bought 0.9715 Swiss franc after posting its biggest gain in more than two weeks on Thursday.

Sterling held steady at $1.2216 before data later on Friday expected to show a plunge in British retail sales.

China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, a Chinese official said on Thursday, risking fresh protests in the city.

U.S. President Donald Trump has warned that Washington would react “very strongly” to the legislation.

There is a risk that Hong Kong could lose some of its favourable U.S. trading terms that have helped it maintain its position as a global financial centre.

The Hong Kong dollar was little changed on Friday near the top end of its narrow 7.75-7.85 band against the greenback. Shares in Hong Kong tumbled more than 5%, highlighting investors’ concerns.

Washington and Beijing are also at loggerheads over Chinese companies’ access to advanced technology and criticism of Beijing’s response after the novel coronavirus emerged late last year in the central Chinese province of Hubei.

The tension has stirred memories of last year’s drawn-out trade war between the two economic superpowers, which roiled global financial markets.

Onshore, the yuan briefly fell to the lowest since April 2 before paring losses to trade at 7.1210 against the dollar.

Chinese Premier Li Keqiang pledged higher infrastructure spending and other measures to support the economy at the National People’s Congress on Friday.

China did not issue a growth target for 2020, the first time since it began publishing such goals in 1990, as the world’s second-largest economy reels from the coronavirus.

The antipodean currencies nursed losses as risk sentiment took a blow.

The Australian dollar fell 0.49% to $0.6535. Across the Tasman Sea, the New Zealand dollar eased to $0.6106.

New Zealand is considering distributing cash directly to households to help the economy recover from the coronavirus pandemic, the country’s finance minister said on Friday.

The idea of direct cash transfers to households, sometimes called helicopter money, is drawing attention as the pandemic inflicts the worst blow to the global economy since the Great Depression in the 1930s.

Elsewhere, the yen edged up to 107.46 per against the greenback. Japan’s currency also rose 0.6% against the Aussie and gained 0.4% against the kiwi due to safe-haven inflows.

The yen did not budge earlier in the Asian session when the Bank of Japan decided the details of a lending scheme for small companies hurt by the pandemic at an emergency meeting on Friday.

The U.S. dollar edged lower against the euro on Tuesday as the common currency added to Monday’s gains following news of a Franco-German proposal for a fund that would offer grants to European Union regions and sectors hit hardest by the coronavirus pandemic.

Encouraging results from the trial of a vaccine for COVID-19 reduced demand for safe havens and the greenback rose to a near one-month high against the Japanese yen..

Germany and France, whose agreements usually pave the way for broader EU deals, proposed that the European Commission borrow 500 billion euros ($550 billion) on behalf of the whole EU. The Commission is expected to outline their proposal before a European summit scheduled for May 27.

The euro was 0.25% higher against the greenback at $1.0942, on pace for a two-day gain of about 1 percent.

“The Franco-German proposal represents a material step forward towards harnessing joint fiscal capacity to provide sustained fiscal stimulus to support the economic recovery,” said Lee Hardman, currency analyst at MUFG.

The common currency was also supported by a survey showing German investor sentiment improved much more than expected in May as concerns eased about the impact of the coronavirus pandemic on Europe’s largest economy.

The greenback found little support from data showing U.S. homebuilding dropped by the most on record in April.

The U.S. currency, which draws safe-haven flows when risk appetite falls, has assumed a softer tone as investors took heart from encouraging early-stage data for a potential coronavirus vaccine.

“The USD is a safe haven just like the CHF or JPY and it was safe havens under pressure from yesterday morning straight through to now,” said Brad Bechtel, global head of FX at Jefferies.

Governments scaling back lockdown restrictions has also helped investors grow optimistic that economies could soon return to normal.

The Australian and New Zealand dollars hung onto hefty gains on Tuesday amid progress on reopening the global economy and optimism about an eventual vaccine.

Against the Japanese yen, which tends to draw investors during times of geopolitical or financial stress as Japan is the world’s biggest creditor nation, the dollar rose 0.55% to a near one-month high.

The pound rose 0.49% against the dollar, a small recovery relative to its recent seven-week lows, as sterling is held down by Brexit risks and speculation about negative rates.

The dollar nursed losses against major currencies on Tuesday after encouraging results from the trial of a vaccine for COVID-19 improved sentiment in a boost to riskier assets.

The euro held onto hefty gains against the Swiss franc and the dollar following a proposal by France and Germany for a 500 billion euro ($543 billion) recovery fund offering grants to regions hit hardest by the coronavirus crisis.

Currencies linked to commodities and other riskier assets were broadly supported, helped also by a sharp rebound in oil prices as investors’ focus turned to recovery from the pandemic.

“There has been a big improvement in risk sentiment because of hopes for a vaccine,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Volatility is falling for stocks and dollar-funding costs are lower. It’s easy for the dollar to fall and for other currencies to ride the dollar’s losses higher.”

Wall Street shares, emerging market assets, and commodities all rallied after encouraging data from a COVID-19 vaccine trial by U.S. drugmaker Moderna added to the optimism as more governments scale back lockdown restrictions.

The euro bought $1.0913 on Tuesday, having gained 0.9% against the greenback in the previous session.

The common currency traded at 1.0613 Swiss franc after jumping on Monday to the highest in more than two months.

The euro’s rally overnight came after France and Germany proposed that the European Commission borrow money on behalf of the whole EU for the recovery fund. The news also sent Italian government bond yields skidding to their lowest in more than a month.

The proposed fund is mostly expected to benefit Italy and Spain, whose economies have been hit hard by the coronavirus pandemic but have weak public finances.

The euro’s sudden rise will face a test later on Tuesday with the release of the closely-watched ZEW survey on German investor sentiment.

The pound also benefited from the dollar’s losses and rose to $1.2204, but traders are bracing for the release of British jobs data later on Tuesday.

The dollar was little changed at 107.39 yen.

While coronavirus infection rates in many places have now fallen to levels low enough to allow factories and businesses to re-open, some concern remains because the outbreak is not completely under control.

The novel coronavirus, which causes the COVID-19 illness, first emerged in China late last year and has paralysed global economic activity as it spread across the world.

In the onshore market, the yuan was steady at 7.1090 per dollar. Investors in the pair remain wary due to simmering tension between the United States and China over trade policy and criticism of China’s early response to the coronavirus.

The yuan is likely to trade narrowly ahead of China’s annual parliament meeting due to start on Friday, where the government is expected to unveil economic targets and stimulus plans.

Moreover, some economists are starting to question whether the People’s Bank of China should adopt quantitative easing to finance an expected surge in government bonds.

Elsewhere, the antipodean currencies stood tall against their U.S. counterpart, benefiting from the improvement in risk appetite and rising commodity prices.

The Australian dollar traded at $0.6530, close to a one-week high, after the release of minutes from the Reserve Bank of Australia’s most recent monetary policy meeting offered no surprises.

The New Zealand dollar rose 0.25% to $0.6054. The kiwi rose briefly after Reserve Bank of New Zealand Deputy Governor Geoff Bascand told Reuters the central bank will re-evaluate its monetary easing in about three months to determine whether “to do more or take the foot off the pedal a little bit.”

The dollar held firm on Monday as optimism about a reopening of economies stifled by the coronavirus pandemic kindled cautious risk appetite, with a jump in oil prices lifting commodity currencies such as the Norwegian krone.

The gradual easing of lockdowns has raised hope across global markets despite signs of fresh trade tensions between the United States and China, though traders were wary of taking big bets before more data this week.

“Markets are quietly risk-on overnight,” said Adam Cole, chief currency strategist at RBC Capital Markets.

The dollar index, which posted gains of about 0.6% last week, inched up 0.02% after drifting slightly in negative territory in the early hours of trading in Europe.

U.S. Federal Reserve Chairman Jerome Powell’s willingness to print more dollars and extend the monetary stimulus further to fight the coronavirus economic crisis was welcomed by investors.

Bets against the U.S. dollar shrank to the smallest position in seven weeks in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

The Norwegian krone was lifted by rising oil prices, supported by output cuts and signs of a recovery in demand.

“The surge in oil prices will also provide a selective opportunity to sell the U.S. dollar against oil-sensitive major currencies,” wrote Stephen Innes, chief global markets strategist at AxiCorp.

Against the dollar, the krone jumped 0.7% to 10.1770. Other commodity currencies also rose and gold gained more than 1.2% to its highest in over seven years.

Gains in stocks also lifted other major currencies such as the Australian dollar, which was up half a percent at $0.6446. The euro fell 0.1% to $1.0806.

Against the yen, the U.S. currency lost about 0.2% at 107.20 per dollar after data showed Japan slipped into recession for the first time since 2015. Policymakers are bracing for the nation’s worst postwar slump.

Investors were also looking to Purchasing Managers’ Index surveys due across major economies later this week for the next insight into the outlook.

The pound took back some ground lost earlier against the euro and was trading at 89.14 pence after a week-long deadlock over a post-Brexit trade deal with the European Union.

Money markets also ramped up expectations of negative interest rates in the United Kingdom for the first time ever as policymakers debated further steps to support the struggling British economy.

The Bank of England’s chief economist, Andy Haldane, did not rule out such a move in an interview with the Telegraph newspaper published on Saturday.

The U.S. dollar was set for a small weekly gain on Friday and the Australian dollar for a 1% drop this week as the threat of a second wave of coronavirus infections rattled investors.

Total cases in Germany increased by 913 to 173,152 on Thursday and the death toll rose by 101 to 7,824 after the country eased the nationwide lockdown imposed to safeguard the economy and protect lives.

New infections were recorded as well in other countries which have eased restrictions on public life, denting earlier investor optimism that economies could go back to normal soon.

As hopes faded for a quick global recovery from the pandemic, traders unloaded the trade-sensitive Aussie and moved into safer assets such as the U.S. dollar.

“The risk is clear that the opening of economies takes longer to materialise vs what markets are discounting,” said Carl Hammer, head of macro and FICC research at SEB.

The euro was last neutral versus the dollar at $1.0812, set for a 0.3% weekly loss. The common currency held its ground after German economic output contracted by 2.2% in the first quarter, as market participants were expecting.

The German economy slid into a recession after suffering its steepest quarterly contraction since the 2009 financial crisis as shops and factories were shut down in mid-March to fight the spread of COVID-19, preliminary data showed on Friday.

Moreover, the euro zone economy experienced its deepest contraction on record in the first three months of the year against the previous quarter.

“Data published since the first estimate has been generally weaker than expected and we see a risk of the first estimates being revised down for several countries,” SEB’s Hammer said.

Kit Juckes, macro strategist at Societe Generale, said that euro/dollar “is too weak already to fall fast”. The common currency had fallen to $1.0636 in March during the coronavirus- induced market rout and is now trading not far from that level.

The U.S. dollar was steady against a basket of currencies at 100.23, although set for a 0.4% gain for the week on rising Sino-U.S. tensions. U.S. President Donald Trump signaled a further deterioration of his relationship with China over the coronavirus outbreak, saying he had no interest in speaking to President Xi Jinping right now and going so far as to suggest he could even cut ties with the world’s second largest economy.

The Australian dollar and the New Zealand dollar were both flat at 0.6461 and 0.5992 respectively. The Aussie dollar, nonetheless, was on course for a 1.1% decline since Monday.

The antipodean pair, like other majors, have struggled for traction in May as investors and authorities weigh optimism about easing virus containment measures against the risk of more infections and the sheer scale of economic damage already done.

The yen was up 0.1% at 107.09 per dollar, but has been grounding lower this week as U.S. Federal Reserve officials talked down the prospect of negative rates, also buoying the dollar.

Elsewhere, the British pound remained under pressure, falling 0.2% to $1.2207, following the British government’s reiterating its refusal to extend the Brexit transition deadline beyond December.

The Swedish crown, which took a massive hit in March was recovering and SEB estimated that on a trade-weighted basis, the currency was now at a stronger level then before the COVID-19 crisis started. The crown was last up 0.1% at 9.8035.

The dollar strengthened towards a three-week high on Thursday as stock markets weakened broadly after Federal Reserve Chairman Jerome Powell dismissed speculation about negative interest rates.

European stock markets were down more than 1% while U.S. stock futures indicated a negative start for Wall Street, pointing to a third consecutive session of losses and sending investors to the relative safety of the greenback.

Comments from U.S. President Donald Trump also lifted the dollar. Trump said he supported a strong dollar, a day Jerome Powell rejected the idea of using negative interest rates.

Though Powell is the latest in a parade of policymakers to brush off the notion that rates may enter negative territory, Fed futures were pricing a small chance of sub-zero U.S. rates by March next year.

Powell also said the recovery could take some time as he warned of a recession worse than any since World War Two.

“His words were a blow to the optimism that had been building in the markets over the last few weeks as the relaxation of social distancing restrictions had generated expectations of a V-shaped recovery from the virus crisis,” said Raffi Boyadjian, senior investment analyst at XM.

Against a basket of its rivals, the dollar edged 0.2% higher to 100.37, hovering below a three-week high of 100.44 tested earlier this week.

While the Fed chairman also urged more fiscal stimulus to support the economy, Mark Haefele, chief investment officer at UBS Global Wealth Management said the ongoing tensions between Republicans and Democrats suggested additional stimulus is “unlikely to immediately materialize”.

Among major currencies, the Australian dollar led losers after data showed the country shed jobs in April at the fastest pace on record, suggesting more monetary and fiscal easing may be needed to support the economy.

The Aussie fell 0.3% to $0.6437 after data showed unemployment increased by 594,300 in April, slightly more than the median estimate. The jobless rate rose to a five-year high.

The pound also tumbled below the $1.22 line for the first time in more than five weeks after Wednesday’s data showed Britain’s economy shrank by a record 5.8% in March as the coronavirus crisis escalated.

Investors are now focused on data from the United States and Europe in the next two days for more clues on the depth of the downturns there. U.S. initial jobless claims data is due on Thursday while the eurozone reports first-quarter GDP data on Friday.

The dollar was on the defensive against its rivals on Wednesday as traders looked to Federal Reserve Chairman Jerome Powell’s speech amid rising speculation the United States could one day adopt negative interest rates.

The New Zealand dollar fell to this week’s low after the country’s central bank expanded its asset purchase program and indicated readiness to take further steps — including negative interest rates.

The dollar traded at 107.21 yen, little changed so in Asian trade after having slipped from Tuesday’s peak of 107.76, its highest since April 24.

The euro changed hands at $1.0848 after having gained about 0.4% in the previous session.

U.S. President Donald Trump on Tuesday again pushed the Federal Reserve to adopt negative interest rates, a hot topic in financial markets since last week when U.S. money market instruments started to price in a chance of negative rates.

Data showed on Tuesday U.S. consumer prices dropped 0.8% in April, the biggest since the Great Recession, raising the spectre of deflation as the economy sinks deeper into recession and fueling the debate about policy responses.

“I would advise against negative rates. Japan has done that but the perception here is that it wasn’t so good,” said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.

“But what’s worrying is that Trump is now talking about them. Looking at past examples, the Fed has eventually done what Trump wanted quite often.”

Powell will be speaking on current economic issues in a webcast hosted by the Peterson Institute for International Economics at 9:00 a.m. (1300 GMT).

Up until now, Fed officials have said they do not see a need to cut interest rates below zero and some market players expect Powell to stick to that script.

“If markets price in U.S. negative rates further, the Fed will need much more communication to rewind such market moves at a greater cost,” said Kazushige Kaida, head of FX sales at State Street Bank and Trust’s Tokyo Branch.

“I think his message is more likely to be something in the line that the Fed is focusing its efforts more on credit easing than negative rates.”

Still, investors think that will become an option especially if the coronavirus outbreak leads to further deterioration in the U.S. economy.

Top U.S. infectious disease advisor Anthony Fauci on Tuesday warned Congress that a premature lifting of lockdowns could lead to additional outbreaks of the deadly coronavirus.

His comments cast a shadow on optimism in financial markets in recent weeks that the worst period of the epidemic is over and the economy can only get better.

U.S. stock prices also slid, led by high-flying technology shares, adding to the cautious mood on the economic outlook.

That put a brake on a rally in risk-sensitive currencies such as the Australian dollar.

The Australian currency last stood at $0.6476, little changed on the day and off Monday’s one-week high of $0.6562.

The New Zealand dollar lost 0.6% to $0.6036, touching its lowest level this week, after the Reserve Bank of New Zealand’s policy announcement.

It expanded asset purchase to NZ$60 billion from NZ$33 billion while its policy minutes said negative interest rates are a future policy option.

The British pound stood near its lowest levels in five weeks at $1.2269, pummeled also by continued confusion over government plans to ease lockdown measures, the worst Covid-19 death toll in Europe and revived Brexit risks.

Official data published on Tuesday showed Britain’s death toll from Covid-19 exceeded 40,000 as of early May, having overtaken Italy as the worst affected country in Europe.