Good morning,

After a dismal day of trading for the pound, markets are holding their breath for the midday statement to Parliament from Boris Johnson, and his following address to the nation at 8pm. Sterling sentiment over the last 24 hours has been guided mainly by the rumours swirling on what fresh restrictions will be put into place now that Britain’s second spike is well underway. Some 0.75% was shaved off of GBPUSD and 0.25% against the euro, as pound traders looked to second guess if the Government was considering a second national lockdown, or seeking to expand on its previous localised responses and put increasing strain on an already Brexit beleaguered economy.

To make matters worse for sterling, the global sell of stocks seen in the USA in particular, has had a knock on effect to the pound – as far as currency is concerned, it is treated as a risky asset to hold currently. Markets are suffering from a sharp contraction as second spikes begin to appear globally, with the dollar once again stepping in to pick up on the fear and start its recovery against most majors after one of its worst months on record in August.

As far as data releases go today, it is a fairly quiet one, with the bulk of European and UK inflation data coming out tomorrow for the market to examine off the back of tonight’s announcement.

Have a great day.

Author: Joshua Haden-Jones, Senior Relationship Manager

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