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Pound Appreciates As Virus Spread Slows

The pound strengthened against its major counterparts in the European session on Monday, as investors cheered news of a slowdown in coronavirus deaths across Europe.

While Italy reported the fewest deaths in more than two weeks, France’s daily death count from the novel coronavirus dropped in the past 24 hours and admissions into intensive care also slowed. Elsewhere in Spain, the death rate fell for the third straight day.

In the United States, President Donald Trump warned the country could be headed into its “toughest” weeks, but expressed hope the country was seeing a “levelling off” of the virus crisis.

News that UK Prime Minister Boris Johnson has been admitted to hospital has sent the Pound lower at the beginning of the new week.

The recovery came after housing minister Robert Jenrick said Johnson was fine and was expected to be back at 10 Downing Street soon.

Survey data from IHS Markit and Chartered Institute of Procurement & Supply showed that the UK construction sector contracted at the steepest rate since April 2009 reflecting the impact of the COVID-19 pandemic.

The construction Purchasing Managers’ Index dropped to 39.3 in March from 52.6 in February. A score below 50 indicates contraction. The expected reading was 44.0.

The pound rose to 1.2327 against the greenback, after falling to 1.2210 at 8:00 pm ET. Immediate resistance for the pound is possibly seen around the 1.27 level.

The pound strengthened to a 6-day high of 134.53 against the yen, from a 4-day low of 132.53 hit at 5:15 pm ET. The pound is likely to challenge resistance around the 140.00 region.

Reversing from its early 5-day low of 1.1928 against the franc and a 4-day low of 0.8855 against the euro, the pound drifted higher to 1.2045 and 0.8765, respectively. The pound may seek resistance around 1.25 against the franc and 0.84 against the euro.

The material has been provided by InstaForex Company – www.instaforex.com