Pound stumbles as Covid and Brexit bites
Monday 21 December, 2020
Daily Currency UpdateThe pound finds itself faltering as the year comes to an end with new Covid 19 restrictions and cases sweeping across the South East and London. This has led France to shut its borders to the UK completely for 48 hours and many other European countries are following suit with travel bans as well. To add to the woes another significant Brexit deadline was missed at the weekend, which means that the European Parliament cannot ratify the deal before the end of the year. Grant Shapps, the UK Transport Secretary, has assured the market that the UK will not be seeking an extension to the transition period. This has seen sterling lose almost 2% since markets opened in Asia last night and the giddy heights of GBPUSD 1.35+ are long gone.
Key MoversOn the other side of the Atlantic (and the other side of the market) the US have approved a significant bi-partisan deal to provide $900bn of fiscal spending to the US economy, a key step in re-boosting the economy. This has seen the US Dollar partially pull back some of the losses it has endured over the last few weeks. AUD/USD, always a good indicator of risk in the market, has dropped back over 1%. Month end and year end as well could see further re-positioning from investors. In the meantime, from London we will wait to see where Covid 19 restrictions and Brexit updates leave the pound.
- GBP/USD: 1.3100 - 1.3450 ▼
- GBP/EUR: 1.0840 - 1.1050 ▼
- EUR/USD: 1.2160 - 1.2250 ▼
- GBP/AUD: 1.7590 - 1.7740 ▼