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UK Facing New COVID-19 Strain, Pound Falls

Sterling and Asian markets fall after news of a new COVID-19 strain.

COVID-19The United Kingdom's health minister recently revealed that a new, more contagious COVID-19 strain has been found in the U.K. This pushed the British government to impose additional restrictions, including harsher lockdowns. It's still not clear whether the new strain has reached the rest of the European countries, though Italy and South Africa have already announced their first cases.

“We’re learning about it as we go, but we already know enough, more than enough, to be sure that we must act now,” said Prime Minister Boris Johnson. “When the virus changes its method of attack, we must change our method of defense.”

The number of cases in the UK has been rising significantly in the last few days, as this new variant has spread quickly in London and southeast England. So far, the United Kingdom has reported 2,040,147 COVID-19 cases as well as 67,401 deaths. The vaccination campaign continues, while the Oxford/AstraZeneca vaccine is still under scrutiny.

Following the news of this new strain, many countries, among them Canada, France and Ireland, decided to restrict travel from the United Kingdom. European Union member states are set to meet soon to discuss a joint response.

It's still not clear whether this new strain is deadlier or would affect the current vaccination campaign. According to experts, it seems that this strain is not very different from the existing one, aside from a higher transmission rate. The announcement of the new strain spread unease in the financial markets. In Asia, the markets were mainly in negative territory. The Nikkei 225 went down by 0.18 percent at the end of the session, closing at the 26,714.42 level, while the S&P/ASX 200 went down by 0.08 percent, closing at the 6,669.90 level.

By 9:00 GMT, the pound sterling went down by 1.85 percent against the US dollar, hitting the 1.3270 level.

Ibeth Rivero
About Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

 

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