British Pound Falls Amidst New Strain of Virus and Halted Freight
Last week, most of us thought that the biggest factor affecting the financial markets this weekend would be the ongoing Brexit negotiations. How wrong we were.
On Saturday evening, a stoney faced Boris Johnson addressed the nation amid a new, highly contagious, strain of Covid-19 spreading rapidly across the south-east of England and causing case numbers to soar.
Whilst many people will be distraught over the cancellation of the Christmas relaxation period, the greater worry should undoubtedly be the impact that this new strain will have on UK health and the economy.
Other countries were quick to react to the news this weekend by imposing travel bans against the UK. France was the first of, at least, 20 countries, imposing strict restrictions for 48-hours on the movement of people and freight from Britain.
Whilst truck-borne freight is still free to travel in the opposite direction, haulage firms are understandably reluctant to send cargo when there is no guarantee a swift return will be possible.
The 48-hour embargo has been designed to give EU member states an opportunity to coordinate their joint response to the news coming out of the UK.
This move by France creates the possibility of major delays on the UK’s main link for freight with the EU, causing alarm among UK industry.
In response to the weekend's events, at the time of writing, the British pound has fallen more than 1.5% against the US dollar, wiping out the gains of last week.
The news of this new Covid-19 strain comes at what should be the climax of the post-Brexit UK-EU trade negotiations.
With the UK currently battling on two fronts, expect volatility in pairs involving the GBP in the coming days.
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