The British pound lost 1.01% to $1.2710 around 1:10 p.m., following hitting $1.2705, its lowest since September 2020.
The US dollar took advantage of its safe haven status once morest several major currencies on Monday, including the pound but also the euro and the yuan, as the worsening of the pandemic in China raised fears for the economy.
The British pound, considered a riskier asset, lost 1.01% to $1.2710 around 1:10 p.m., following hitting $1.2705, its lowest since September 2020.
The euro also hit its lowest in more than two years at $1.0707.
The Dollar index, which compares the greenback to a basket of other major currencies, took 0.45% to 101.67 points following reaching 101.74 points, a record since March 2020.
The yuan, whose course controlled by the Chinese state is not integrated into the Dollar index, lost 1.16% to 6.5774 yuan, its lowest for a year.
The death toll from Covid-19 rose to 87 on Sunday in Shanghai, still confined, while the Chinese capital Beijing called for “action without delay” following a rebound in positive cases.
The Chinese market on Monday faces “both the negative trend that reigned in the American market at the end of last week and the fears around Beijing’s zero tolerance on infections, which poses a risk for the economic outlook”, explains Victoria Scholar, analyst at Interactive investor.
The dollar is also benefiting from the prospect of a sharp tightening of monetary policy by the US Federal Reserve (Fed), which has signaled its desire to act quickly to counter inflation.
The pound also suffered from the scandal of the parties organized in Downing Street in full confinement which led Parliament to open an investigation targeting Prime Minister Boris Johnson.
“Political uncertainty is adding pressure on the pound,” comment OFX analysts, as the UK economy further shows signs of weakness, which might limit the scope for the Bank of England to tighten policy. to counter inflation.
The euro for its part lost 0.61% to 1.0724 dollars, following having reached its lowest since March 2020.
“Fears over Chinese growth overshadowed France’s election relief for the euro,” said MUFG analyst Lee Hardman.
Emmanuel Macron’s victory in the French presidential election on Sunday was not accompanied by a lasting jump in the euro, as was the case five years ago.
“It’s more because of the strength of the dollar than for political reasons… Mr. Macron is the candidate for continuity and stability, so the market is not reacting to his widely anticipated victory”, comments Neil Wilson , analyst at Markets.com.
The yen, another safe haven, took on the contrary 0.23% to 128.20 yen once morest the dollar.
Finally, bitcoin, a cryptocurrency that often moves in line with risky assets, lost 3% to $38,409, its lowest for more than a month.
