The pound slightly dropped against the dollar as COVID-19 death toll rises

Number of Covid-19 deaths in the UK has grown to more than 16,000

Even though daily death chart improves, number of daily new confirmed COVID-19 cases has slightly grown.

The government began to discuss whether its lockdown measures were not eased too early. In a reaction to the latest data, the pound has dropped against the dollar in 0,2%. Moreover, the pound has lost 0,2% against the euro. Some investors cut their long positions on the currency, which caused its fall.

“We’re quite sure that the outlook for the pound is good in the long term horizon. In a short term, the currency may drop as some easy money will leave the market,” Dean Turner, an economist at UBS Wealth Management, told Reuters.

According to Turner, the pound is undervalued and its return to fundamental value should come only by last quarter of this year. The British currency is paying for insecurities around Brexit, but it’s also the coronavirus pandemic, what froze economic activities in the country. While questions around Brexit might be solved soon, a start of economic recession is rather inevitable.


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