Boris Johnson and the UK Government introduced new measures to stem the spread of the virus yesterday. These include penalties for not wearing masks or gathering in groups of 6+, office workers working from home where possible, and hospitality venues closing by 10 pm. The pound sold off across the day with GBPUSD reaching 9-week lows.
While yesterday’s new restrictions are aimed at creating a balance between minimising the spread of the virus and preserving the economy, the threat of further potential action enhanced the selling pressure on the pound. GBPUSD fell to the bottom of the $1.27 handle while GBPEUR dropped back into the €1.08s. The UK is now in focus across the globe on 2 fronts: Brexit and the new nationwide restrictions.
Today will be an interesting one with respect to economic data. Starting with the eurozone and working its way to the UK and then the US, flash PMI data for September will be released. Both manufacturing and services numbers are due, with many investors eager to confirm whether September has so far been a positive month for expansion or not.
Written by Viv Savani. 8:07am, September 23rd 2020
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