GBP/USD Exchange Rate Sinks as PM Warns Against Lifting Lockdown Prematurely
The Pound to US Dollar (GBP/USD) exchange rate fell by -0.4% this morning, with the pairing currently trading around $1.244.
Sterling struggled after Prime Minister Boris Johnson said lifting the UK’s nationwide lockdown prematurely could lead to a ‘second peak’. This has left many GBP investors concerned as the economy is severely compromised.
British Culture Secretary Oliver Dowden commented:
‘The PM is very concerned about a second peak if we lift the restrictions too soon.’
‘The worst thing we could possibly do would be to prematurely ease the restrictions, and then find a second peak and have to go right back to square one again, potentially with even more draconian measures.’
The Pound (GBP) also failed to benefit from the good news of the UK’s fewest fatalities in weeks.
With Spain and France also recovering, this has provided some light at the end of the tunnel. As a result of Europe’s improvement in recent weeks, some Pound investors hoping that aspects of the UK’s nationwide lockdown could be eased in the coming weeks.
US Dollar (USD) Edges Higher as NY Mayor Says State is ‘On The Other Side’ of Covid-19
The US Dollar (USD) continued to edge higher this week after the Mayor of New York, Bill de Blasio, said that the state is now ‘on the other side’ of the coronavirus crisis, with deaths and the rate of infections falling in New York.
Saturday also saw US President Donald Trump announce that several states had taken ‘concrete steps to begin a safe, gradual and phased opening’ despite warnings from some governors to wait until further testing was made available.
US Dollar (USD) investors are also becoming increasingly hopeful over Gilead Sciences’ promising coronavirus treatment. According to the University of Chicago Medicine, the new drug known as Remdesivir, has shown ‘rapid recoveries in fever and respiratory symptoms’.
As a result, stock markets jumped on the news that there could be a potential cure for Covid-19 in the near-term.
However, if global market sentiment continues to improve in the light of lessening coronavirus cases, we could see the safe-haven ‘Greenback’ shed some of its gains.
GBP/USD Forecast: Could the ‘Greenback’ Sink on Improving Risk Sentiment?
US Dollar (USD) investors will be awaiting tomorrow’s publication of March’s US Chicago Fed National Activity Index. If the gauge slumps due to the coronavirus’ effect on the American economy, we could see the ‘Greenback’ benefit on rising concerns for the global economy.
The GBP/USD exchange rate will remain sensitive to the UK’s coronavirus developments throughout the course of this week, with any indications that the number of fatalities and cases climbing leaving Sterling traders concerned for the British economy going forward.
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