Further drops for pound as details of British PM’s health are uncovered

Denise Jackson

The British pound appeared to be on a losing streak in the foreign exchange markets last night after the health of Prime Minister Boris Johnson appeared to get increasingly worse last night.

Johnson was first admitted to hospital with the coronavirus on Sunday evening, but an announcement made last night revealed that he had since been taken to the intensive care unit.

According to a statement from his office, the move was taken following the advice of medical professionals around him.

The knock-on effect for the pound was significant as the forex markets came to terms with the fact that the UK is without its normal leader.

Instead, the first secretary of state – a title which in practice means deputy prime minister – will deputise for Johnson.

The current holder of the role is Foreign Secretary Dominic Raab.

The development also raises concerns about the potential of an internal Conservative Party leadership election in the event that Johnson is unable to continue in office.

The instability caused by an election would in itself pose a risk for the forex markets, and this could be exacerbated by the context of the ongoing coronavirus pandemic.

The pound was down in its pair against the US dollar.

It had previously been noted at $1.230 but was more recently seen at $1.225.

The single European currency was seen at 0.877 prior to the development, and later went up to 0.881.

Despite the news from the UK, more widely there was a perception that a corner might be about to be turned in the battle against the pandemic.

According to figures revealed by leaders in some major eastern US states, a “flattening” of the curve could be on the way.

The remarks came from the governors of the states of New Jersey and New York.

However, the overall death toll in the US stands at 10,000 – with the overall number of cases at around 350,000.

In any case, the US dollar carried on surging as investors continued liquidating other investments to funnel it all into the greenback.

The greenback was up by 0.64% in its pair against the Japanese yen, reaching 109.14 at one stage.

Part of the reason for this development could be that Japan is about to impose a severe lockdown on its citizens.

Analysts have suggested that the position of the global economy may be more to blame.

Further positive news came from Europe, where some of the worst-hit nations began to show signs that their lockdowns could come to an end.

The two countries in particular to find themselves in this situation are Spain and Italy, which are seeing consistent drops in death levels.

The Australian dollar was also a big riser over the course of the day – and it even managed to take on the dollar.

In its pair against the greenback, it was seen at $0.6088 at one stage – which reflected a rise of 1.55% across the course of the day.

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Denise Jackson
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