The pound fell yesterday as pressures mount on the UK economy. Infection numbers continuing to rise so dramatically has pushed the UK government to announce a 3rd nationwide lockdown to alleviate strain on the NHS.
After tapping $1.37 yesterday morning the pound sold off across the day, down to the low $1.35s. GBPEUR was hit with the cross falling over 1% to close the New York session in the mid €.1.10s. While the outlook is a lot healthier for the pound, with a Brexit deal struck, a central bank now less inclined to lower interest rates as well as 2 vaccines being rolled out, the short-term pressures have risen, with the economy now in a full lockdown and the NHS under severe pressure. The next few weeks could see increased volatility just when participants expected the opposite.
Today’s economic calendar remains light with German unemployment and retails sales data on tap in the morning. This will be followed by US ISM manufacturing numbers in the afternoon. The Georgia Senate runoff sees voting begin today too.
8:29am, January 5th 2021
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