Dollar recovery pushes sterling below $1.35

By Elizabeth Howcroft

INTERNATIONAL – The pound was among the risk assets hurt by the recovering dollar on Monday, falling below $1.35 (R20.86) for the first time in 2021, while investors weighed up the risk of the Bank of England introducing negative rates.

The pound has fallen against the dollar and euro so far this month, after the last-minute Brexit deal signed in December was quickly overshadowed by tighter lockdown measures to combat the spread of a new variant of Covid-19.

Widening US Treasury yields and the expectation of more fiscal stimulus lifted the dollar against its rivals on Monday, pushing cable below $1.35 for the first time since Dec.30.

The next few weeks of the pandemic will be the worst so far in terms of people hospitalised, the government’s chief medical advisor, Chris Whitty, said.