Pound Sterling

Second UK Lockdown Fears Hit Markets as UK Officials Sound Coronavirus Alarm

Pound News: Threat of New Restrictions Pushes Pound Lower

In statements made today, UK medical officials signalled strongly that action must be taken to prevent Britain’s coronavirus situation from escalating significantly. This led to fears that the UK could see fresh nationwide lockdown measures, resulting big Pound losses today.

Markets are now highly anticipating the UK government’s plans for what restrictions may be put in place. Coronavirus developments from the government over the coming days will be hugely significant for GBP exchange rates.

On top of this, UK-EU trade talks resume this week while the Internal Market Bill remains in the spotlight, both of which will likely drive volatility in the Pound.

Euro News: Coronavirus Surge Pressures EUR

Strength in the US Dollar, as well as concerns of rising Eurozone coronavirus cases kept pressure on the Euro today, preventing the Euro from capitalising on the Pound’s weakness.

Added to this, Germany’s central bank, the Bundesbank, warned that the recovery in the Eurozone’s largest economy was slowing and that the rebound is losing momentum, adding pressure to EUR exchange rates.

Eurozone consumer confidence data is due to be published tomorrow. If this or speeches from European Central Bank (ECB) officials surprise investors, the Euro could see a shift in direction.

US Dollar News: Coronavirus Outbreaks Boost Safe-Haven USD

Recognising similarities with March trade, global markets rushed to safe havens today as the coronavirus second wave appeared to solidify in more major economies, benefitting the safe-haven US Dollar.

Developments in the global coronavirus pandemic will continue to drive market safe haven demand in the coming sessions. An upcoming testimony from Federal Reserve Chairman Jerome Powell may also be influential tomorrow.

Canadian Dollar News: Coronavirus Keeps a Lid on CAD Gains

The Canadian Dollar advanced against a weak Pound today, thanks to its correlation with the strengthening US Dollar. However, as the global and Canadian coronavirus situations worsen, the Canadian Dollar’s appeal is limited.

The trade-correlated Canadian Dollar may continue to be hit by a worsening global coronavirus outlook, especially if prices of Canadian exports like oil take a fall.

Australian Dollar News: Risk-Aversion Keeps the ‘Aussie’ from Gaining

While Australia’s coronavirus situation appeared to be improving in recent weeks, concerns about the global rise in coronavirus cases is keeping investors hesitant to buy risk-correlated currencies like the Australian Dollar.

No notable Australian data is due tomorrow as the Australian Dollar will likely be driven by coronavirus developments until Wednesday, when key Australian PMI data will be published.

Upcoming Data

Tuesday, 22nd September

11:00    UK CBI Industrial Trends Orders

15:00    Eurozone Consumer Confidence

15:00    US Existing Home Sales

15:30    Federal Reserve Chairman Powell Testimony