The Pound is slipping lower at the start of the new trading week after surging 7% across the previous week. The Pound struck a low of US$1.1435 last week, just up from its 35 year low touched the week before.
The Pound versus US Dollar exchange rate then soared to 2-week high of US$1.2486, on a weakening dollar. The pair has been extremely volatile as it responds to coronavirus headlines, lock downs, central bank action and economic data.
At 07:30 UTC, GBP/USD has declined 0.4% to US$1.2400 on a stronger dollar, amid warnings of lock down extensions.
3 Month UK Lock Down?
The Pound is pausing for breath after a magnificent run higher in the previous week. Despite the number of coronavirus cases escalating, the Bank of England said it stood ready to take further action. Chancellor Rishi Sunak also announced further measures to support the UK economy.
As the new week begins, the number of cases in the UK has totalled 19,500 whilst the death toll has breached 1200. The peak in the UK is forecast for in around 2 weeks’ time
The UK government’s leading epidemiology adviser, Professor Neil Ferguson, said over the weekend that the UK would need to stay in lock down for 3 months to avoid the full impact of coronavirus. Social distancing could be in place until October.
There is no high impacting UK data today. Investors will look ahead to UK consumer confidence figures due for release tomorrow. Analysts are expecting to see morale plummet in March as the coronavirus outbreak escalated.
Trump Extends Stay At Home Guidelines To End April
The US has become the world leader in number of infections. Total confirmed cases had reached 130,000, with 2413 deceased. New York is the epicentre. Daily figures from the world’s financial capital and media hub will be closely watched.
Last week initial jobless claims data and consumer confidence figures showed the devastating impact that the measures protecting Americans from the virus were having on the economy. The number of people signing up for unemployment benefit jumped to 3.3 million, 4 times the record high of 695,000 reached in 1982.
Trump has extended his stay at home guidelines until the end of April. This week PMI data, ADP figures and the all-important non-farm payroll will be under the spotlight.