The Pound Sterling briefly collapsed in early June due to concerns about a planned about the total repeal. It is rrelated to the social restrictions in the UK. It is because the coronavirus cases there is not too worse.
However, the UK government has been adamant that it will maintain its original plan to end all lockdowns by 21 June. It made the pair of GBP/USD to increase back up to 1.4180 in today's trading.
The UK government's call for a total repeal of all social restrictions began to be lifted at the end of last month. The cause is the increase in the number of new COVID-19 cases due to the spread of the COVID-19 virus variant from India.
However, the death rate due to the coronavirus in the UK has decreased. On Tuesday, the UK recorded the zero daily mortality rate for the first time since the pandemic broke out.
The Statement from the Prime Minister
PM Boris Johnson stated that the government just need a little longer time to figure out the effects of the coronavirus variant from India. However, he added something about the latest progress.
He doesn’t see anything in the current data which means that they can't go ahead with stage four which is planned to be opened on June 21. However, they must be very careful because
It is because there is no doubt that the ONS data on infection rates shows an increase. Some members of Johnson's cabinet are also optimistic related to the progress of the UK's vaccination programme.
The program has created a safe enough environment for the normalisation of economic activity. The news was then welcomed by market participants where they have the sams optimism.
The GBP Bullish Chance
Some analysts think about the possibility of the gbp's bullish potential. It is even if the deadline for lifting social restrictions is actually postponed. The decision taken based on a reason.
The reason is because the schools, shops and non-essential services have started to operate again in the easing phase that is already underway. The government will not close them again.
However, only a certain number of social restriction rules remain in effect until June 21 and may be delayed. That is done as a preventive step to avoid the worse thing happened in the future.
June 21 is a particularly symbolic date for the opening. That is also a day of celebration for sports fans and party fans. That was stated by an analysts several days ago.
The Prediction About Sterling
A strategist named Rochester have his opinion about this British currency. Rochester acknowledged Sterling would probably face a selloff if the government delayed opening on June 21.
However, that sell-off action was only going to be short-lived and thus opened up the opportunity to buy Sterling again. So far, that is the probability that may happened for Thay currency.
The final decision on the realization of the deadline of June 21 will be discussed in a cabinet meeting on June 14. It is for sure that the topic is awaited by so many market participants nowadays
The development of the UK's COVID-19 case between today and then is likely to continue to be in the spotlight. Furthermore, the restrain Sterling's movement in a limited range may be happened too.
Meanwhile, the USD is up
The US dollar rose after the US economic data released on Thursday (03/June) tonight, showing the good improvement. This further reinforces the signal that the United States' economic recovery is stabilizing.
It is especially after the COVID-19 pandemic. According an expert from the Tempus Inc Washington, the weakening of the US Dollar has apparently has some benefits for the company.
The U.S. economy is getting away from the crisis due to the pandemic. Mean while, the indicators have also provided clear signs of momentum.
