European session review: GBP strengthens, responding to UK government's stimulus plan and broad risk-on sentiment

GBP rose against other major currencies in the European session on Thursday, as the British pound remained supported by the UK finance minister Rishi Sunak’s coronavirus recovery plan, while hopes of a swift global economic recovery bolstered the broad risk-on sentiment.

On Wednesday, Sunak unveiled the government’s plans, pledging new measures worth up to GBP 30 billion that were intended to help "protect and create jobs". In particular, he introduced a kickstart scheme subsidizing jobs for the young, a stamp duty holiday on properties, a VAT cut for the hospitality sector and a “Eat Out to Help Out” scheme offering discounts at restaurants.

Meanwhile, the Brexit risks continued to weigh on the British currency. The UK and EU negotiating teams kicked off a new round of talks on a post-Brexit trade deal on Tuesday. Germany's Chancellor Angela Merkel said that progress in Brexit negotiations had been slim despite accelerated efforts from both sides. She also promised to "continue to push for a good solution", but added that the EU should "prepare for a possibility of a no-deal scenario."