GBP appreciated against other major currencies in the European session on Tuesday, as the U.S. Federal Reserve's pledge to buy a potentially unlimited amount of government debt and the Bank of Japan's (BoJ) extension of risky asset-buying boosted risk sentiment.

The UK's PM Boris Johnson announced a nationwide lockdown in an effort to curb the coronavirus outbreak, calling it the "biggest threat this country has faced for decades". The latest data from the Department of Health and Social Care revealed that 6,650 people have tested positive for Covid-19 and 335 patients have died as of March 23.

Investors also received gloomy data from IHS Markit and CIPS, which showed that the UK private sector saw its record decline in business activity in March amid emergency public health measures to contain the spread of  COVID-19. The IHS Markit/CIPS UK Composite PMI tumbled to 37.1 in March from 53.0 in February, signaling the fastest downturn in private sector business activity since the series began in January 1998. The prior low of 38.1 was seen in November 2008.

In its turn, the Confederation of British Industry's (CBI) latest survey revealed the manufacturing output expectations for the next three months fell to -20, the lowest level since the financial crisis, as the COVID-19 outbreak gained pace in the UK and Europe.