- GBP/USD saw little reaction when the UK PM confirmed earlier government leaks that England will enter a stricter lockdown.
- Prices are currently consolidating just above the 1.3550 mark after a day of steep losses.
GBP/USD has flatlined just above lows of the day just under 1.3550 set midway through US trading hours. The pair trades with losses on the day of around 0.6% or 80 pips heading into the first FX close of the year, having slipped from earlier highs above the 1.3700 level set during the European morning session. The move lower has coincided with a broader recovery from multi-year lows in the US dollar, though GBP (for the reasons discussed below) is the underperforming G10 currency on the day.
UK PM Boris Johnson confirms England lockdown
GBP sold off on Monday in anticipation (and amid leaks suggesting that) UK PM Boris Johnson would announce a stricter national lockdown in England to tackle the alarming rate at which the virus continues to spread in the country.
In terms of the latest Covid-19 numbers; nearly 60K new cases were recorded in the UK on Monday, a new pandemic record, while the daily admission of Covid-19 patients to hospitals in England surpassed the peak recorded back in April and hit 3145. Deaths came in at just over 400, but many expect this number to rise back above 1000 per day.
PM Johnson announced in a televised address that given the dire state of the situation, which is being worsened by the spread of the much more transmissible new variant of Covid-19 in the UK, England would have to take tougher measures to reduce transmission of the virus, following in the footsteps of Scotland earlier in the day. A stricter lockdown was announced, as expected, that will involve the closure of schools and a ban on outdoor team sports until at least mid-February, starting on Tuesday.
In wake of the confirmation of the third national lockdown in England, the PM is reportedly facing increased calls for further support for businesses, reported the FT.
Separately, an FT report suggested that “red tape” and “a lack of back-up stocks” are affecting the rollout of the UK’s Covid-19 vaccination programme. The report comes after similar fears were aired over the weekend about potential vaccine shortages.
Note that the AstraZeneca/Oxford University vaccine, which was approved last week, is now being rolled out and the pharmaceutical giant is expected to be providing the UK with 2mln doses per week by the middle of January. According to the PM in his statement to the nation on Monday, all members of the nation’s most at-risk category could have received at least one shot of the Pfizer or AstraZeneca/Oxford University vaccine by mid-February.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD holds gains near 0.7000 amid PBOC's status-quo, Gold price surge
AUD/USD is clinging to mild gains near 0.7000 early Monday. The pair benefits from a risk-on market profile, China's steady policy rates and surging Gold and Copper prices. Focus now remains on Fedspeak for fresh impetus.
Gold price hits an all-time high to near $2,440
Gold price (XAU/USD) climbs to a new record high near $2,441 during the Asian trading hours on Monday. The bullish move of the precious metal is bolstered by the renewed hopes for interest rate cuts from the US Federal Reserve (Fed).
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.