Difficult Day For The Pound After Brexit And Coronavirus Concerns
After trading on Monday, it was clear that the Pound was suffering due to concerns over Brexit negotiations but also news that local clusters of coronavirus outbreaks could put the brakes on economic recovery. The currency, according to the foreign exchange market lost ground against the Euro and the US Dollar, finishing the day at 1.0943 and 1.231 respectively. There were hints that interest rates might have to fall further although there is hope that the economic recovery plan to be announced by Boris Johnson will help to strengthen the pound during trading on Tuesday.
There were improvements in the Eurozone economic sentiment during Monday, pushing the Euro higher. This comes as more countries are easing lockdown measures and even opening to tourists. The single currency was also bolstered by the German consumer price index, that indicated that inflation had grown at a faster rate than expected.
As coronavirus cases continued to increase in the US, investors were still wary about how the economy could reopen, resulting in them continuing to take safety in the safe-haven currency. It is likely that the US Dollar will strengthen again through trading today providing the negative news around coronavirus still lingers around.