UK coronavirus business loan scheme approval rate half of Germany’s – City AM

Anil Panchal FXStreet

Early Monday morning in Asia, City AM came out with the news suggesting the weakness of the UK’s coronavirus business interruption loan scheme (CBILS).

Key quotes

The UK’s coronavirus business loan scheme has half the approval rate of its German equivalent, data has shown, as chancellor Rishi Sunak mulls the creation of a new program targeted at the country’s smallest businesses.

The latest figures from banking body UK Finance showed on Thursday that 16,600 firms had received loans worth a total of £2.8bn through the coronavirus business interruption loan scheme (CBILS). There was an acceptance rate of 46 percent.

Through CBILS, lenders offer loans worth up to £5m to firms with a turnover of up to £45m. They are 80 percent guaranteed by the Treasury.

The approvals rate pales in comparison to the equivalent German scheme, which also released numbers last week. It has lent €8.5bn (£7.4bn) through state bank KfW to 13,000 firms, with an approval rate of 98 percent.

FX implications

The news fails to offer any major market implications. As a result, GBP/USD remains mostly quiet around 1.2370, down 0.04% on a day, by the press time.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.