Pound Shrugs off Further Covid Restrictions as UK Backs Brexit Deal

Tradehay.com: 31/12/2020 - 06:43

The pound rose against the dollar to a nearly one-week high, shrugging off another surge in Covid-19 cases that forced further parts of England into further lockdown.

GBP/USD rose 0.8% to $1.3609, its highest level since Dec. 24.

Several areas of the country went into the toughest tier four restrictions on Wednesday after Covid-19 cases surged above 50,000 for the second day in a row.

The UK reported 50,023 cases on Wednesday, just below the record 53,275 seen a day earlier, prompting Prime Minister Boris Johnson to warn that people should not "in any way think that this is over."

"We are continuing to see unprecedented levels of COVID-19 infection across the UK, which is of extreme concern particularly as our hospitals are at their most vulnerable," said Susan Hopkins, a senior medical advisor to Public Health England.

The lockdown measures are expected to lead to a larger decline in UK growth, an economic think tank warned.

"By Easter that could mean the economy being 6% smaller than what was hoped just a month ago," said Torsten Bell, chief executive of Resolution Foundation, according to the Guardian.

As the pandemic looks set to worsen by the day, AstraZeneca (NASDAQ:AZN) offered a semblance of hope as its coronavirus vaccine was approved for emergency use in the UK. It could be distributed early in the New Year.

The bitter-sweet day in the UK arrived just as the post-Brexit agreement won the backing of parliament by 521-73 votes.

The deal has, however, came under fresh scrutiny for its lack of coverage for the UK's crucial financial services sector.

“In 2018 in Mansion house, I said that we wanted to work to get a financial services deal in the future treaty arrangement and that it would be truly groundbreaking,” former Prime Minister Theresa May said.

"It would have been, but sadly it has not been achieved. We have a deal in trade which benefits the EU, but not a deal in services that would have benefited the UK."