Despite yesterday being a bank holiday in England, Sterling was still susceptible to losses as damaging news on COVID-19 forced the currency lower. After recording 33,196 cases on Sunday, the UK recorded a further 26,476 new COVID-19 cases on Monday. Given that nearly all of these new cases are of the Delta variant, experts are worried as studies have found “people are twice as likely to need hospital care if they are sick the Delta variant”. Naturally, investors are anxious about how the high number of COVID-19 cases in the UK will affect the economy. Many people believe that with cases remaining high and deaths consistent, lockdowns in the winter months may become inevitable. In Scotland, COVID-19 cases are “roughly” doubling “every week since restrictions eased, leading to an increase in hospital admissions”. Over 500 people are in Scottish hospitals with COVID-19 as case numbers hit a record high at the weekend. It is safe to say that if the spread of the virus continues and governments are forced to impose restrictions, the Pound will suffer.
GBPUSD opened the bank holiday Monday at 1.3776 and closed not far below at 1.3750.
GBPEUR also made a subtle loss yesterday. The pair started at 1.1667 and closed at 1.1660.
FX markets traded rather flat on Monday “amid a holiday in the UK, keeping volumes at their lows”. With the Dollar still weak from the Feds comments last week, and the Euro vulnerable due to poor data, the pair remained balanced in the session, trading in a tight range. Eurozone Economic Sentiment for August missed forecast by 0.4 by printing a final figure of 117.5. German Inflation Rate MoM for August also disappointed by coming in at 0%, despite forecasts of 0.1%.
EURUSD fluttered around the 1.1800 mark for nearly all of Monday’s session. The pair opened the day at 1.1800 and closed at 1.1799.