European session review: GBP depreciates amid renewed coronavirus fears

GBP fell against most major currencies in the European session on Wednesday as coronavirus fears renewed, offsetting stimulus hopes. Market participants shrugged aside the UK government's pledge to launch a 330 billion-pound lifeline of loan guarantees and provide a further 20 billion pounds in tax cuts, grants and other help for businesses facing the risk of collapse from the spread of coronavirus. The UK's Chancellor Rishi Sunak said that Tuesday’s package of measures is unprecedented, although the UK issued guarantees of around 1 trillion pounds during the global financial crisis of 2008.

The coronavirus death toll in Britain rose by 16 to 71 on Tuesday, while the number of confirmed Covid-19 cases surged by 407 to 1,950.

Some scientists criticized the UK's government for moving more slowly than other European countries to limit the spread of the coronavirus. Prime Minister Boris Johnson on Monday tightened restrictions, ordering people to avoid pubs, clubs, restaurants, cinemas and theatres.

Investors are also looking for another interest rate cut, possibly before the Bank of England's (BoE) next scheduled meeting on March 26.

The BoE's newly-appointed governor Andrew Bailey made a promise to “prompt action” on Monday, less than a week after an emergency quarter-point interest rate cut. The UK's central bank is also expected to expand its quantitative easing (QE) program.