GBP - British Pound
UK PM Boris Johnson locked down the UK yesterday in an effort to try and contain the spread of Coronavirus. People are only allowed to leave their house alone or with family members if going to buy food and medicines; if they are taking one daily form of exercise again alone or with people you live with; taking key workers children to school, or between households where their parents live apart. All non-essential retail stores have been told to close with the exception of supermarkets, food stores, chemists, petrol stations, banks and post offices and a few other specialist retailers. The initial period these restrictions will last is three weeks, however it seems likely we will be asked to stay indoors for longer given the sharp uptick in cases and deaths the UK has seen over the past week.
The move has been taken in an effort to try and support the NHS and hopefully avoid scenes like those we are currently witnessing in Italy where emergency services are at breaking point however the predicted path of infections is worryingly similar and London could soon resemble Lombardy should people not social distance and stay at home except where absolutely necessary.
The move seems to have been well received by sterling traders with it up to 1.17 against the greenback and GBP/EUR back up to 1.08. Whether people adhere to the measures will be seen today and more draconian moves to slow the pandemic could be unveiled over coming day should the advice be ignored.
Europe continues to be the focal point of the Coronavirus outbreak with Italy having recorded 6077 deaths from Covid-19 with cases predominantly located in the northern province of Lombardy. Some solace can be taken that the rate of deaths has fallen for two straight days with Monday's figure reported number of 602 down from Saturdays 793. The latest update today will be closely followed and hopefully we will see a further decline.
Spain continues to suffer, in particular Madrid with 462 deaths reported across the country yesterday taking the total to 2182. There are now around 380k cases confirmed globally with nearly 17k deaths as a result of the outbreak.
America has seen cases soar over the past few days with many states now in lockdown as the virus spreads across the country. New York State is particularly badly affected with around half of the countries 31k cases centred there. Despite the senate being unable to agree on a government rescue package for the nation, the US Federal Reserve has intervened offering unlimited funds as a backstop to the economy as well as starting an unlimited QE programme. The European Central Bank is set to unveil further assistance this week in an effort to limit what is likely to be a short but very deep recession, potentially dwarfing that seen in 2008.
Markets seem to be in (relatively) upbeat mood this morning however as all major stock markets post big gains and riskier currencies surge with both the Aussie and Kiwi posting >2% rise against USD.
EUR/USD trades at 1.0860 with USD/JPY at 110.30
1.1610 - 1.18 ▲GBP/EUR:
1.0710 - 1.0870 ▲GBP/AUD:
1.9580 - 1.98 ▼GBP/NZD:
1.9950 - 2.0200 ▼GBP/CAD:
1.6770 - 1.6940 ▲