New virus strain hits pound, euro

Julien Ponthus - The British pound and the euro fell yesterday as investors sought refuge in the US dollar, after a fast-spreading new coronavirus strain shut down much of the United Kingdom and disrupted international freight amid Brexit talks uncertainties.Sterling fell close to 2% against the US dollar in morning trading before prime minister Boris Johnson chaired an emergency response meeting to discuss international travel and the flow of freight in and out of Britain.Much of Europe has cut off transport with the UK sowing chaos for families and companies just days before Britain exits the European Union."The British horror stories of a shortage of goods after a hard Brexit are taking on a whole new drive - for a completely different reason," said Commerzbank strategist Ulrich Leuchtmann.Adding to the transport crisis caused by the virus were fears the UK will crash out of the EU without a trade deal on 1 January.Britain insisted on Sunday that the EU should shift position to open the way to a post-Brexit trade deal, but there was so far no sign a breakthrough.The pandemic stress in Europe overshadowed a weekend deal among US congressional leaders for a US$900 billion coronavirus aid package.DOLLARThe US dollar climbed against major peers yesterday with investors seeking its relative safety as many countries tightened Covid-19 lockdowns.The dollar's rebound comes after it sank to two-and-a-half-year lows last week, driven by optimism that vaccines would help revive global growth.The dollar index gained 0.38% to 90.625, after touching 89.723 on Thursday for the first time since April 2018.OILOil prices dropped more than 3% yesterday. Brent crude slid US$1.74, or 3.3%, to US$50.52 a barrel by 0745 GMT after rising 1.5% to its highest since March on Friday. Yesterday's declines come after seven weeks of gains in prices amid optimism stemming from the rollout of Covid-19 vaccines."The oil market has been on a bull trend in the past month or so, ignoring negative factors, amid an optimism that a widening vaccine rollout would revive global growth," said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co."But investors' rosy expectations for 2021 have suddenly vanished due to a new variant of the virus."COPPER, GOLDLondon copper dipped from a key US$8 000 per tonne level yesterday, after posting seven straight weekly jumps, as a stronger US dollar dented the appeal of the greenback-priced LME metals.Three-month copper on the London Metal Exchange fell 0.5% to US$7 944.50 a tonne by 0727 GMT. It has climbed 81.6% from March lows and surpassed US$8 000 for the first time since February 2013 in the previous session.Metals were also under pressure as the greenback climbed against major peers amid tightening Covid-19 lockdowns globally.A firmer US dollar makes greenback-priced LME metals more expensive and therefore less appealing to potential buyers holding other currencies.Gold climbed to a six-week high yesterday. Spot gold rose 0.9% to US$1 896.56 per ounce by 0745 GMT, having earlier hit its highest since 9 Nov. 9 at US$1 906.46. – Nampa/Reuters

New virus strain hits pound, euro

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Republikein 2025-12-16

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New virus strain hits pound, euro

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