Pound US Dollar Tumbles to Five-Month Low amid UK Coronavirus Concerns

Pound (GBP) Slides on UK Lockdown Lifting 

The Pound (GBP) struggled through yesterday’s session, as the UK’s ‘freedom day’ was marred by surging coronavirus cases and staff shortages due to workers isolating.

With UK daily cases soaring in recent weeks and warnings from the scientific community over the potential for new variants, the UK’s lifting of most lockdown measures weighed on the Pound, rather than supporting it. 

In the absence of any UK data today, domestic coronavirus news will likely dominate GBP exchange rates. Will the government’s gamble pay off or will rising cases continue to spook GBP investors

Euro (EUR) Gains despite USD Strength 

The Euro (EUR) initially dipped yesterday but managed to bounce back, hitting a five-week high against the Pound. 

Increased demand for the US Dollar (USD) pressured the single currency in the morning due to the pair’s negative correlation. Yet the Euro managed to rebound against the ‘Greenback’ and gain on its other major rivals, though there was no clear catalyst for the movement. 

With no market-moving data due out of the Eurozone today, EUR may be open to losses, particularly if risk sentiment remains subdued. 

US Dollar (USD) Buoyed by Souring Mood 

The US Dollar (USD) strengthened yesterday, as fears over surging coronavirus cases shook global markets and boosted the appeal of the safe-haven currency. 

Soaring Covid cases, inflation fears and US-China tensions drained risk appetite from the market, causing a sharp selloff on the stock exchange and investors to flock to the safe US Dollar. 

Risk appetite could continue to drive USD exchange rates today. Will the stock market witness some bargain-hunting, as it did two weeks ago, or will the risk-off mood persist? 

Canadian Dollar (CAD) Tumbles as Oil Prices Collapse 

The Canadian Dollar (CAD) came under heavy selling pressure on Monday, as a 7% plunge in oil prices significantly undermined the appeal of the commodity-linked ‘Loonie’. 

Australian Dollar (AUD) Slumps to 2021 Low on Victoria Lockdown Extension 

The Australian Dollar (AUD) remained on the back foot overnight on Monday, with the prevailing risk-off mood and concerns over the extension of the lockdown in the state of Victoria continuing to limit the appeal of the ‘Aussie’. 

New Zealand Dollar (NZD) Retreats as Risk Appetite Weakens 

The New Zealand Dollar (NZD) also trended lower in overnight trade, with investors largely shunning the risk-sensitive ‘Kiwi’ amidst the souring of market sentiment.