Asian traders sold the Pound late yesterday, causing a sharp half a cent loss as UK Prime Minister, Boris Johnson, was admitted to hospital on the advice of his doctor following persistent coronavirus symptoms – 10 days after he tested positive for the virus. This trend was quickly reversed at the open for European markets, however, and GBP managed to capture gains back above the market close of last week.
We are now seeing most GBP pairs return to range trading whilst the markets wait for direction from governments and central banks on further policy to combat the knock-on effects of the virus. GBP/EUR is trading between 1.1254 and 1.1412, where it finds support on the 100-day moving average and GBP/USD is trading between a near-perfect 2.5 cent range of 1.2208-1.2458. The Pound’s best performance comes against South African Rand over the last month, after Moody’s cut their investment rating to junk. Charts have since seen over a 20% move since the start of March, with traders selling ZAR.
Despite the outbreak appearing to be affecting America the worst of any country globally, the US Dollar still holds its status as the haven currency of choice for nearly all investors. With up to 70% of currency conversions including the USD, traders will want to be liquid when the dust has settled and some normality resumes.
Have a good day,
Author: Jack Nicholls, Relationship Manager
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