Pandemic may help British pound strengthen

The pandemic continues to dominate the headlines, past any Brexit news. The Cable currently trades at around the 1.25 handle, as the British government considers making a move to prolong the lockdown caused by the fast-spreading coronavirus. 

The GBP/USD finds resistance at 1.2580.

The British pound, however, is expected to become the winner from the virus. It is assumed that the GBP will grow to 80 pence per euro for the first time in four years. 

The UK may also gain from the pandemic as the trade deadline date may be pushed back to a later date, helping the sterling to further strengthen. 

“We’ve long had our sights on a return to 0.80 over the coming year for euro-sterling (a sterling rise of nearly 10%) but now we are starting to think that this might be a bit too conservative,” Steven Barrow said, Bloomberg reports.

The stigma of being associated with the EU – and the euro zone in particular –- will only increase as a result of the coronavirus crisis.”

On the other hand, the EUR/USD fell towards the 1.09 handle, with U.S. retail sales missing the headline. Additionally, NY Fed Manufacturing Index dropped to -78.2. 


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