Pound Suffers at the Hands of a New National Lockdown

Investors responded to the news that the UK would be entering another national lockdown and that caused the Pound to trend lower on Monday. There are some serious concerns of a double-dip recession with growth forecasts for Q4 being significantly reduced from 3.6% to 2.4%. As a result, the currency finished the day at 1.1101 against the Euro and 1.2923 against the US Dollar according to the Foreign Exchange Market. As the week moves on, it is likely that the Pound is going to remain vulnerable although a possible Brexit deal could help.

With Germany and other European countries heading into a short lockdown, the Euro also suffered from a lack of support with growth forecasts being slashed. Despite this, the single currency managed to reduce losses after the final manufacturing PMI from Germany showed the factory activity had reached a two year high. However, coronavirus developments are going to determine the direction of the currency today.

The US Dollar remained ahead of its peers on Monday after investors increased their demand for the safe-haven currency. The equity markets experienced a rebound too, which capped the gains but an increase in the ISM manufacturing PMI meant that the US Dollar gained further support.

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