Pound Flying High, but Covid-19 Impact Will Clip Wings, ING Says

By Yasin Ebrahim

Investing.com – The pound made a strong start to the week against the U.S. dollar on Monday, despite an ongoing drip of dearie data, but some have warned further gains for the currency will be hard to come by due to uncertainty sparked by the Covid-19 pandemic.

GBP/USD rose 0.41% to $1.2309.

The pound has corrected from its excessively oversold levels and benefit from improved U.S. dollar liquidity, thanks to a coordinated effort from global central banks, but the currency faces pressure from "fragile" risk appetite due to coronavirus concerns, ING said in a note.

"We look for a range trade in the GBP/USD 1.2000-1.2500 area this week," ING added, while also noting that U.K. data points would continue to have a limited impact on sterling,

U.K. construction activity fell to its lowest level since 2009 last month, as measures to contain the virus has led to nationwide lockdown, halting production and economic activity.

Related Articles

You Need Only Watch the Dollar to Track Market Harm

IMF Mulls Fed-Like Program to Supply Dollars to More Economies

Dollar costs plunge in FX swap markets, still elevated onshore