25 Jun 2020
As a result of UK health experts calling for a review into government preparations for a second coronavirus wave, the British Pound remained unchanged throughout yesterday’s trading session.
The UK Prime Minister Boris Johnson eased the two-metre distancing rule ahead of the reopening of the further shops on July 4th. Now, traders are fearing that the lockdown would be reintroduced if the number of coronavirus cases increase as measures are being eased.
The Confederation of British Industry’s (CBI) distributive trade index is set to be released, which may offer the British currency some relief. The index is expected to highlight an increase in retail activity through June.
Fears of a second wave of infections are impacting the Sterling, holding it back from surging. ING said, “Negatives seem to be piling up for GBP as the UK may (a) face a second virus outbreak right as it attempts to re-establish normality, and (b) get caught in US protectionist fire.”
Further Brexit talks will also weigh in on the currency.
Moreover, the USD spiked higher due to Washington’s decision to consider imposing $3.1bn worth of tariffs on exports from the UK and EU. The American dollar gained safe-haven as investors are thinking about an EU-U.S. trade war over the summer.