21/09/2020

Sterling finishes last week on a lower footing


GBP

The pound finished last week on a lower footing after a combination of rising Covid-19 cases and the Bank of England refusing to take negative interest rates off the table.

Coronavirus cases are beginning to accelerate, with new cases doubling 6,000 per day and hospital admissions rising quickly. Ministers are seemingly resigned to the real possibility that there may be a second national lockdown, and investors are concerned about the devastating impact this will have on the economy and the recent mini recovery.

The possibility of negative interest rates also dragged on sterling, with the Bank of England ready to take further action if necessary. The risk of rising Covid-19 cases, the unwinding of the furlough scheme and Brexit are all weighing heavy and may force the central bank into action.


Key announcements

  • 15:00 – USD – Fed’s Chair Powell Speech

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