November 2-6. Solid lockdowns

2020-10-31

The fundamental background for the GBP / USD pair can still be described with just a few words: Brexit, negotiations on a trade deal, US elections. And during the last trading week there was no news on any of these topics. Now we are waiting for official information from the negotiating groups or top officials of the UK and the EU. However, there is no information yet. But there is information about the possible introduction of a new “lockdown” in the UK. This was stated by Prime Minister Boris Johnson. Quarantine measures may come into force on November 4 and last exactly one month. According to Johns Hopkins University, the number of new cases in the UK continues to rise, with nearly 25,000 new cases recorded in the past three days. Thus, the UK may become the third country after France and Germany to introduce a “hard quarantine”. Earlier, Boris Johnson said that there would be no new lockdown, as it would mean a new economic decline. As you can see, Johnson easily changes his mind and takes the words back, which, however, does not happen for the first time. Well, the new “lockdown” will significantly increase the likelihood of another fall in the British currency, as it will potentially mean a new contraction of the British economy. In the third quarter, UK GDP may grow by 15.1%, but losses in the second quarter are much higher. The UK may enter 2021 with serious losses that will only increase as Brexit officially ends on December 31st.
In American English, lockdown has been used since the 1970s to mean
“Strict isolation of prisoners as a security measure after the riots.” Previously, it was used mainly in prisons. Now the whole world is becoming a big prison.