Dollar Up, Pound Slides Over New U.K. Lockdowns

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© Reuters.

By Gina Lee

Investing.com – The dollar was up Monday morning in Asia, with investors turning to the safe haven as many countries tightened restrictive measures against the COVID-19 virus.

The one that tracks greenback against a basket of other currencies rose 0.40% to 90,909 at. 21:06 ET (02:06 GMT). The dollar rose again from the two-and-a-half-year low seen in the previous week when it touched 89,729 on Thursday for the first time since April 2018.

The United Kingdom was the latest country to introduce new, strict lockdowns to curb a new virus strain. This led to European neighbors including France, Germany, Italy, the Netherlands, Ireland and Belgium closing their borders to travelers, and in some cases freight from the UK Other countries are also considering similar bans.

“The lockdown news and the stalemate on Brexit are keeping the market nervous … the dollar strength is largely driven by pulls lower in the pound,” National Australia Bank (OTC 🙂 (NAB) senior currency strategist Rodrigo Catril told Reuters.

The rapidly spreading strain is causing alarm and overshadowing the news that the US Congress has reached an agreement on a 900 per cent. $ COVID-19 Auxiliary Package with the House of Representatives to vote on the package later in the day followed by the Senate.

The Food and Drug Administration also gave approval for emergency use to Modern Inc’s (NASDAQ 🙂 vaccine mRNA-1273 over the weekend.

The pair tumbled down 0.02% to 103.28.

The pair lost 0.40% to 0.7593 and the pair fell 0.34% to 0.7101. The more risky antipodean currencies weakened at the start of the week as investors rushed towards assets in safe havens. Australia’s largest city Sydney is also battling a new COVID-19 outbreak.

The pair rose 0.22% to 6.5495.

The pair slipped 1.05% to 1.3377 over the UK lockdown news.

Meanwhile, negotiations on a post-European trade agreement with the European Union (EU) will continue later in the day, but both sides failed to reach an agreement. EU fishing rights in British waters remain a particularly fixed point, with UK Health Minister Matt Hancock on Sunday calling them “unreasonable demands” to be dropped from the block.

With the clock ticking towards the end of the year, the risk of the United Kingdom leaving the EU without a deal increases.

However, NAB’s Catril remained cautious with the greenback, even though he predicted the pound could rise to $ 1.50 in 2021 should a last-minute Brexit deal emerge.

“We still can not get our heads around the fact that a trade agreement will collapse due to fishing … in general, I would say that risk positivity driven by vaccines and stimulus plus the fact that fiscal stimulus has to be financed with a lot of loans in the US still paints a picture of dollar weakness in 2021, ”Catril added.

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