ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for March 19, 2020. This is not a trading advice. See details below:
The pound is quite simply collapsing on currency markets. The U-turn of Boris Johnson’s government on the measures to be adopted for containing the coronavirus generated a new selloff on the pound. In just 72 hours the government changed its mind and closed schools, and asked people to limit all non-essential travel. Markets are pricing a likely lockdown of the country with the pound now at a 35-year low against the US dollar.
In just 10 days, the cable (GBP/USD) has fallen from 1.30 to 1.15 (see attached chart), confirming the exodus by investors from the pound. The Bank of England’s rate cut, combined with Brexit uncertainty and now the growing chance of a lockdown are hurting the British currency, with the huge volatility across markets further exacerbating its collapse.
Carlo Alberto De Casa – Chief analyst, ActivTrades