The pound has recovered some ground versus the dollar following yesterday’s jobless claims release which confirmed that an eyewatering 22million people in the US had filed for jobless benefits in March as the pandemic spread and businesses were forced to close their doors as lockdown was announced. The arrival of stimulus checks, part of the record breaking stimulus package announced in the US giving $1200 to every US citizen of working age, will be a welcome relief to many. Exchange rates for GBP/USD now sit back below 1.25 at the time of writing – the best time this week for dollar sellers to act.
Trump Lays Down Plans to Relax Lockdown
Donald Trump presented his “Opening up America Again” strategy to the White House yesterday providing some much needed clarity on the process that will be followed to return the US economy back to relative normality once the Covid-19 pandemic begins to ease.
The plan outlines a 3 step plan for each State to adopt once the number of coronavirus cases begin to show a sustained downward trajectory. Phase One includes opening some sit down restaurants and places of worship but on the condition that social distancing rules are strictly adhered too, phase two will reopen schools and allow non-essential travel, and phase three will allow “public interactions,” with pubs and restaurants allowed to increase their capacity while people continue to physically distance – this Trump suggests, should be the new norm.
Although a detailed insight in to how America will reopen for business, Trump could not give any specific timeframes on when this transition would begin, pointing instead to a month long observation program.
UK Lockdown Extended by Three Weeks
In contrast to the communication from Trump in the US, UK foreign secretary Dominic Raab announced a three week extension to the current UK lockdown to May 3rd. Conditions will remain the same, with a respite from home for exercise, essential shopping and to work where this can not be done from home. Despite much negative publicity surrounding a lack of compliance to the rules in the press, Raab praised the British public for their compliance and asked us to continue to diligently follow the guidelines.
Raab however, refused to be pressed for an answer on when or even how the lockdown may be eased in the UK and there remains significant uncertainty on the government’s plans in this respect moving forward. This uncertainty could be an issue for the pound as plans elsewhere become clearer, the UK and arguably GBP will not benefit from this uncertainty.
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