The pound sterling and the euro depreciated on Monday as investors preferred the US dollar to hedge after the Covid-19 spread. The growing contagion has led to the British administration closing down most of the UK, banning international flights and the uncertainty of Brexit negotiations.
The international transport system was also affected after several countries began taking action to close the border to stop flights from the UK to curb the spread of the so-called faster virus.
The sterling currency depreciated by almost 2% against the US dollar today before Prime Minister Boris Johnson chaired a joint sitting to discuss the issue of international travel and the inflow and outflow of goods from Britain.
Adding to the pressure on the pound is the Brexit issue which still fails to reach a trade agreement agreement. Anxiety is felt when there is a possibility of a ‘no deal’ that exceeds 50%.
The pound depreciated 1.50% against the US dollar to the 1.3220 exchange rate. The Euro fell 0.45% against the US dollar to the 1.2200 exchange rate as of 9.50 p.m.
The agreement reached in the US $ 900 billion Covid-19 stimulus package has prompted the strengthening of the US dollar. The US dollar continued to strengthen as most investors sought hedges as most countries tightened Covid-19 sanctions. Also contributing to the strengthening of the US dollar is market confidence in the effectiveness of vaccines that can curb the spread of the Covid-19 epidemic.
The US dollar index, which measures the greenback against major currencies, recorded an increase of 0.58% to the exchange rate of 74.00.
