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Weekly roundup: Pound rocked by coronavirus concerns

currency-newsWeekly roundup: Pound rocked by coronavirus concerns
The pound traded in a wide range last week, mostly as a result of domestic coronavirus concerns.

This saw Sterling drift lower against the majority of its peers through the first half of the session, amidst a notable rise in new cases of the Delta variant of the coronavirus.

The worrying jump in new cases stoked concerns that the UK government may need to delay its plans to reopen the final parts of the economy on 21 June.

Reinforcing this downturn was the publication of May’s finalised manufacturing PMI, which saw UK factory growth revised slightly lower than initial estimates.

The pound then mounted a recovery in the middle of the week following some optimism from Boris Johnson regarding the reopening of the UK economy, as he suggested that there is currently ‘nothing in the data at the moment that means we cannot go ahead with step four’.

While this uptick in Sterling was aided by a stronger-than-expected UK services PMI release on Thursday, it proved short lived, with GBP exchange rates stumbling again as the session came to a close, after data showed domestic coronavirus cases more than doubled for the week.

So far this week, it looks like the pound will remain highly sensitive to coronavirus developments, particularly after Health Secretary Matt Hancock suggested the government is ‘open’ to delaying the next stage of lockdown easing.

Also in focus for GBP investors will be the UK’s latest monthly GDP release. Will a strong growth reading in April offer some support to the pound at the end of this week?
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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