Pound Falls Amid U.K. Reopening Doubts
07 Giugno 2021 - 10:11AM
RTTF2
The pound was lower against its most major counterparts in the
European session on Monday, as the rapid spread of new COVID-19
variant in Britain sparked concerns about a reopening on June
21.
The so-called Delta variant, which was first identified in
India, was found to be about 40 percent more transmissible than the
U.K. strain of virus.
U.K. Health minister Matt Hancock said on Sunday that it was too
early to say whether the government could stick to its reopening
timeline, which has set the date of June 21 to end the
lockdown.
Caution prevailed following comments from U.S. Treasury
Secretary Janet Yellen that the President's $4 trillion spending
plan is positive for the economy, even if it leads to a higher
inflation and an eventual rate hike by the U.S Federal Reserve.
Focus now shifts to May's U.S. consumer price data due on
Thursday for policy clues.
Data from Lloyds Bank subsidiary Halifax and IHS Markit showed
that U.K. house prices increased at the fastest pace in nearly
seven years in May driven by the easing of national lockdown
restrictions and the gradual reopening of the housing market.
House prices grew 9.5 percent year-on-year in May, following
April's 8.2 percent rise. But this was slower than the 10 percent
increase expected by economists.
The pound dropped to a 5-day low of 1.2703 against the franc and
a 4-day low of 0.8613 against the euro and was steady thereafter.
The pound had ended Friday's deals at 1.2726 against the franc and
0.8584 against the euro.
The pound fell to 154.55 against the yen, its lowest level since
May 27. Should the pound falls further, 150 is likely seen as its
next possible support level.
In contrast, the pound recovered to 1.4175 against the
greenback, off an early low of 1.4111. On the upside, 1.45 is
possibly seen as its next resistance level.
Looking ahead, the U.S. consumer credit for April will be out in
the New York session.
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