British Pound Falls Against Dollar Amid Virus Concerns
By Joice Alves
LONDON, July 21 (Reuters) – The pound fell slightly on Wednesday and was expected to experience its fifth consecutive daily decline against the dollar amid the growing number of cases of COVID Delta variants in Britain and confusion over the lifting of restrictions in England.
The pound fell this week to its lowest level since February 4 at $ 1.3572 after Prime Minister Boris Johnson lifted most COVID-19 restrictions in England in what local media dubbed Freedom Day.
The government said while cases were on the rise, hospitalizations and deaths remained low.
“Confusion over the removal of foreclosure measures remains a drag for GBP in the near term,” UniCredit analysts wrote.
The British pound is down 0.2% against the dollar at $ 1.3608 as it “tries to stabilize after a poor week so far,” said Jane Foley, head of currency strategy at Rabobank. GBP = D3
Against the euro, the pound is up 0.1%, changing hands at 86.40, after falling to a two-month low of 86.69 pence against the single currency the day before. EURGBP = D3
Analysts have said the pound will likely remain under pressure against the euro as the Johnson government presents its approach on the Northern Ireland protocol to the Brexit deal to the British parliament on Wednesday. The rules agreed for the British-ruled province have been controversial since Britain severed ties with the EU.
“Another wave of news suggesting that the EU and the UK are at odds over the Northern Ireland protocol will not help sentiment today,” Rabobank’s Foley said.
Britain on Tuesday asked the European Union to “reflect” after the bloc published a plan for post-Brexit negotiations on the future of Gibraltar, which London says seeks to undermine British sovereignty over the territory .
Keeping the pound under control, a Lloyds Bank investigation showed Britain’s economic rebound after winter shutdowns cooled in June despite an increase in business in the hospitality industry.
At the same time, UK public sector net borrowing, excluding public sector banks, fell to 22.8 billion pounds ($ 31.0 billion) in June, still the second highest June figure on record. . Economists polled by Reuters were forecasting a drop to 21.6 billion pounds.
(Report by Joice Alves edited by Peter Graff)
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