It was a difficult day for the Pound on Monday, which was dubbed as ‘Freedom Day’, as increasing covid cases continued to place pressure on the currency.
Furthermore, the issue of people having to isolate and worker shortages also resulted in concerns for the economy. So, the lifting of coronavirus restrictions didn’t support the Pound but instead, it held it back. At the end of trading, the Pound finished at 1.159 against the Euro and 1.3669 against the US Dollar according to the Foreign Exchange Market.
On Tuesday, the Euro experienced an initial dip although it managed to recover any losses during the afternoon, eventually hitting a five-week high against the Pound. An increase in demand for the US Dollar put pressure on the single currency as a result of the negative correlation. However, the Euro did bounce back and make gains on other rivals, although movement was limited.
As global markets reacted to growing covid-19 cases, the US Dollar strengthened, making the safe-haven currency an appealing prospect. Inflation fears and US-China tensions removed appetite from the market and that saw investors take advantage of the Greenback.