The pound climbed to a record high against the US dollar in yesterday's trading session, after British PM Boris Johnson returned home from the hospital at the weekend. In the Asian session this morning (14 / April), GBP / USD climbed again as high as 0.5 percent to around 1.2560s. The pound also gained prestige versus the Euro and Japanese Yen.

Pound sterling had been snared by unrest because Boris Johnson was rushed to the ICU due to worsening Coronavirus infection. This shows how the Pound is still vulnerable to domestic political uncertainty, although the impact of the Coronavirus on economic conditions has caught the attention of global investors.

Fortunately, the Prime Minister has now been discharged from the hospital. Also, the Federal Reserve's move to extend swap cooperation agreements with various world central banks - including the Bank of England (BoE) - has pushed down the exchange rate of the US Dollar.

This has supported the Pound rally for a while. However, the outlook for the future is still uncertain. "The phenomenon of Risk On-Risk Off (RORO) returns violently," said David Bloom, head of global forex research at HSBC, "This means that more and more diverse financial market assets are moving in close correlation and mainly driven by a specific factor."

Various Efforts Continued to Be Up to GBP

USD, JPY, and CHF tend to perform well when negative sentiment. Conversely, NOK, AUD, SEK, and NZD underperformed in an atmosphere of negative sentiment. Bloom assesses the Pound is now also included in the second group, probably because of Brexit and the loosening of British relations with the giant economy of the Eurozone.

The UK has the largest current account deficit in the G10 and a large financial sector that requires funding in USD, signaling fragility to weakness amid market volatility. GBP / USD also tends to follow oil prices, which outlook remains unsatisfactory. "

The pound continues its attempt to break the important resistance threshold versus the US dollar. When the news was written at the beginning of the European session (9 / April), GBP / USD had climbed almost 0.4 percent to around the 1.2430s.

The pound also returned to its strongest month-long record against the Euro amid market players' disappointment at the top European Union member states. Positive sentiment for the GBP comes from the recovery of the health of the British Prime Minister and a number of the latest economic data.

Pound Starts Firmly Given PM's Improved Conditions

Yesterday, British Foreign Secretary Dominic Raab told the media that PM Boris Johnson's health condition was stable. Finance Minister Rishi Sunak even said that Johnson "was already sitting on the bed and interacting positively with the medical team." The pound responded to this news by continuing the appreciation that had been interrupted when the PM was rushed to the emergency room.

"Sterling is starting to strengthen because he has been waiting for an update on the condition of British Prime Minister Boris Johnson. Johnson has been in hospital since Sunday and has been in ICU since Monday because his Coronavirus symptoms have worsened. Recent reports indicate that the Prime Minister is in stable condition. Pounds can be burdened political turmoil if Johnson's condition worsens, due to the lack of constitutional rules for succession if he has to be replaced, "said Joe Manimbo, senior market analyst at Western Union.

Positive sentiment for the Pound also spread from several monthly economic reports. Data from the UK Office for National Statistics shows industrial production still grew 0.1 percent (Month-over-Month) in February while manufacturing production increased 0.5 percent in the same period.

Both data exceeded consensus expectations. This slightly dampened disappointment with UK GDP data for the February period which recorded -0.1 percent versus 0.0 percent expectations.