The Great Britain pound was soft today, though it managed to gain on the Swiss franc. The major source of the sterling’s weakness was the news that the country will enter a second lockdown this week.
British Prime Minister Boris Johnson announced on the weekend that the country will enter a strict month-long lockdown on November 5. The Prime Minister was planning to make the announcement on Monday but was forced to do it prematurely as the news was leaked to various newspapers. The lockdown will remain in place until December 2. The news fueled concerns about the possible heavy damage to the nation’s economy such measures can cause.
Not everything was bad for the sterling, though. Market participants were hoping that the European Union and the United Kingdom will be able to achieve a trade deal before the year’s end. Some analysts say that the deal may be achieved as soon as in two weeks.
Additionally, Britain’s macroeconomic data released on Monday was not bad. The seasonally adjusted IHS Markit/CIPS Manufacturing Purchasing Managers’ Index fell a bit to 53.7 in October from 54.1 in September according to the final estimate but was above analysts’ forecasts and the preliminary estimate of 53.3. Being above the 50.0 level of no growth, the index suggested that the sector continued to grow, albeit at a slower pace. The report commented on the result:
The recovery in the UK manufacturing sector continued at the start of the final quarter, as output and new orders rose again supported by improved demand from both domestic and overseas sources. That said, the upturn showed further signs of losing impetus, as the initial boost to growth from the economy reopening faded and job losses accelerated.
GBP/USD fell from 1.2922 to 1.2909 as of 20:19 GMT today, touching the low of 1.2854 intraday. GBP/CHF advanced from 1.1823 to 1.1868. GBP/CAD sank from 1.7198 to 1.7079 after rising to the session maximum of 1.7281 earlier.
If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.
