Daily Currency Update
GBP - British PoundThe pound is lower this morning as risk aversion permeates the markets as Covid-19 cases continue to rise throughout the world. In the UK there was another confirmed 22,885 infections yesterday with 367 deaths, the latter being the highest figure since late May. As a result, markets have flocked to safe haven assets such as the dollar and yen and the pound has been sold off aggressively in early trading with GBP/USD plunging from around 1.3060 to below 1.30. The prospect of some pretty dire weather forecast for the UK over the next week is likely to do little for the outlook as people look to shelter indoors raising the chances of the virus being spread. Datawise there is little of note from the UK for the rest of the week so local coronavirus cases, the US election and the rising prospect of European shutdowns will dominate the news and the direction of sterling. GBP/EUR trades at 1.1050.
Key Movers
Stock markets have been rattled throughout Europe this morning as soaring coronavirus cases raise the chances of stricter lockdown measures being implemented around the continent. France is an area of particular concern with 33,417 cases being confirmed yesterday. The number of fatalities, 523 was the highest since April and with President Emmanuel Macron scheduled to address the nation this evening there is growing speculation stricter controls are about to be announced. There is also growing concern in Germany over rising cases and it has been reported that Chancellor Angela Merkel is mulling over a month long closure of bars and restaurants in November, in an effort to try and get the pandemic under control and in an effort to save Christmas. The realisation that Europe is already on its way to a severe second-wave has seen equity markets throughout Europe drop, with Germanys DAX particularly badly hit falling around 3% and heading towards lows not seen since May. The much resilient euro has finally seen some losses with EUR/USD back under 1.18 ahead of tomorrows European Central Bank interest rate decision. No change of policy is expected however comments from Bank chief, Christine Lagarde re: the pandemics spread will be closely monitored as we head towards winter. Finally, we are only six days from the US election and Democrat nominee Joe Biden continues to hold around an 8-10 point lead in national polling. President Donald Trump is on a campaign blitz today with several appearances across the country scheduled.
Expected Ranges
- GBP/USD: 1.2960 - 1.3080 ▼
- GBP/EUR: 1.10 - 1.11 ▲
- GBP/AUD: 1.8190 - 1.8320 ▼
- GBP/NZD: 1.94 - 1.9555 ▼
- GBP/CAD: 1.7120 - 1.7250 ▲