Sterling remained steady this morning, it only fell slightly against the broad-based stronger dollar, after the UK said it would extend its coronavirus lockdown for at least three more weeks.
Foreign Secretary Dominic Raab said Britain could not risk the progress it had made in fighting the outbreak by easing up on restrictions at this “delicate and dangerous stage”.
He said there is no time frame for the easing of restrictions as it would be irresponsible to give an indication of when the rules would change.
The pound had sunk to its lowest level in decades as COVID-19 spread across Europe, killing thousands and overwhelming healthcare systems. The UK announced a nationwide lockdown at the end of March.
Since then sterling has recovered by nearly 7% against the euro. It was little changed at 87.05 pence, compared with a low of 0.95 pence on March 19.
Britain’s exit from the European Union – due to be formalised at the end of this year – has taken a back seat since the health crisis started, raising speculation that Prime Minister Boris Johnson may have to ask for an extension to the December deadline.
If the government do not ask for an extension to the transition period, predictions are that this could have a negative impact on the pound.
Shares in US pharmaceutical manufacturer Gilead (GILD) are over 16% higher pre-US open after reports that the company’s antiviral drug trials had shown positive results in treating patients with COVID-19.
The trials at the University of Chicago showed that the drug quickly improved fever symptoms with nearly all of the patients involved in the trial being discharged within a week. The company said in a statement that they were waiting for additional data from ongoing trials.