New Covid Restrictions Forces Pound to Drop

The Pound took a tumble on Wednesday as it reacted to news that new covid restrictions would be brought back in.

Even though the new strain is looking as though it could come with milder symptoms, the Prime Minister decided that new restrictions would help to stop the spread. This placed pressure on the currency and forced it downwards. As a result, it finished the day at 1.1643 against the Euro and 1.3208 against the US Dollar according to the Foreign Exchange Market.

The Euro strengthened against many of its rivals yesterday following news that the European Central Bank would increase its stimulus programme in light of the new Covid variant. This gave the single currency a boost as this will result in a tightening of monetary policy.

There was some selling pressure on the US Dollar as the impact of the new variant left investors concerned about the economic recovery. Pfizer/BioNTech announced that a third vaccination would neutralise the new variant and this helped to boost markets and as a result, the appeal of the safe-haven currency dropped.

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