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Great Britain Pound Mixed as UK Enters New Lockdown

January 5, 2021 at 17:13 by Vladimir Vyun

50 pound notes and some coins on the UK flagThe Great Britain pound was mixed today after the United Kingdom has entered a new lockdown due to a surge of new coronavirus cases caused by the new strain of the COVID-19. The sterling fell against commodity currencies, gained on the US dollar, and was about flat versus other most-traded currencies.

UK Prime Minister Boris Johnson announced yesterday a new strict lockdown as the number of new infections was surging after a new strain of the novel coronavirus had emerged. Johnson stated:

It is clear that we need to do more to bring this new variant under control. That means the government is once again instructing you to stay at home.

People will be able to leave their homes to buy essential supplies, seek medical treatment, and for other urgent reasons, but non-essential shops and institutions will be closed. It is expected that the lockdown will stay in place at least till the middle of February.

Economists are concerned that the restrictions will derail the economic recovery, and that can have a tremendous negative impact on the pound. So far, though, the currency fared relatively well, holding its ground after yesterday’s slump.

Today’s trading session is empty in terms of macroeconomic releases in Britain. Yesterday, the seasonally adjusted IHS Markit/CIPS Manufacturing Purchasing Managers’ Index showed an increase to the three-year high of 57.5 in December from 55.6 in November according to the final estimate. Traders were expecting the same 57.3 reading as in the preliminary report.

GBP/USD gained from 1.3568 to 1.3634 as of 17:12 GMT today. EUR/GBP traded at 0.9020, near the opening level of 0.9024, after rising to the session maximum of 0.9054 intraday. GBP/NZD dropped from 1.8905 to 1.8804.

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