New coronavirus restrictions announced by the UK government caused the GBP to US Dollar rate to drop to 1.2735 on Tuesday according to the Foreign Exchange Market. Along with this, there was also a drop in the GBP to Euro rate to 1.0878. The measures were not as draconian as the ones introduced in March yet investors are still very cautious. Despite this, any concerns surrounding negative interest rates were eased after the Bank of England made an announcement that this was not necessary yet.
During Tuesday trading, the Euro remained relatively rangebound after more concerns about coronavirus continued to hamper the single currency. New restrictions are beginning to be implemented across the Eurozone and again, that has caused investors to prepare themselves for a disruption in the recovery of the economy. Today, the preliminary PMI’s for September are going to be released and this could mount further pressure as private sector activity is likely to slow.
The US Dollar continued to tick higher yesterday following some optimism from the Federal Reserve after they testified in front of congress. The safe-haven currency was also boosted after market sentiment weakened following coronavirus concerns yet again.