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RationalFX: Sterling Strengthens As New Cases Fall

RationalFX:  The pound rose against both the dollar and the euro on Monday as Prime Minister Boris Johnson returned to work after recovering from Covid19….

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Sterling was also boosted by improving global risk appetite and hopes that lockdown measures may start to be eased as the number of coronavirus cases in Britain appears to slow. Britain is now seeing a downward trend in the number of people who are in hospital with the new coronavirus.

Boris Johnson said the UK must find a way to ease lockdown measures without bringing back a second wave of the deadly virus. Johnson gave no details of when or how lockdown measures might ease but will give more details in the coming days and said that a second spike of the virus ‘would mean not only a new wave of death and disease but also an economic disaster’.

Furthermore futures data on Monday showed that the market turned bearish on the British currency for the first time since December last year with negative bets on sterling outnumbering positive bets according to weekly futures data for the week to April 21st.

The pound’s long-term prospects are hampered by risks relating to Brexit, which will come into focus again as soon as coronavirus lockdown measures start to ease. Lastly talks between the European Union and Britain will commence via teleconferencing but the British government still holds firm that it will not extend the transition period beyond the December 2020 deadline, even if a deal has not been reached

Key Announcements

12:30 – USD – Advance GDP q/q – Forecast at -3.9% from previous 2.1%

6:00 – USD – FOMC Statement

6:30 – USD – FOMC Press conference

Source : ETFWorld.co.uk

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