# British pound drops as investors seek safety on ‘Freedom Day’ Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-19 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: Sterling Hits Three-Month Low Despite England's Freedom Day Meta Description: Stay updated on the latest developments as the pound weakens and global market uncertainty persists. Prime Minister Johnson lifts most restrictions in England URL: https://financedigest.com/british-pound-drops-as-investors-seek-safety-on-freedom-dayhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-19t112026z1lynxmpeh6i0i1rtroptp4health-coronavirus-britain-reopening-1736838161092-compressed.jpg) LONDON (Reuters) – Sterling fell to a three-month low on Monday even as most COVID-19 restrictions in England were lifted, as a cautious tone in global markets meant riskier currencies lost out in favour of the safe-haven dollar. Britain faces a new wave of COVID-19, but Prime Minister Boris Johnson is lifting most restrictions in England in what some have dubbed Freedom Day. Johnson has urged the public to remain cautious. [Stock markets fell in the Asian and early European sessions as a surge in worldwide coronavirus cases spooked investors](https://www.financedigest.com/influx-of-one-time-investors-swapping-stocks-for-bricks-and-mortar-reports-agency.html "Influx of ‘one-time’ investors swapping stocks for bricks and mortar reports agency"). [Wall Street](https://www.financedigest.com/asian-stocks-edge-up-before-u-s-jobs-data-defying-wall-street-selloff.html "Asian stocks edge up before U.S. jobs data, defying Wall Street selloff") was set to open lower. Last week, the pound had its worst week in a [month versus the dollar](https://www.financedigest.com/european-shares-hit-nine-month-high-dollar-wobbles-after-powell-remarks.html "European shares hit nine month high, dollar wobbles after Powell remarks"). The [downward turn continued on Monday with sterling](https://www.financedigest.com/britains-bleak-outlook-sets-sterling-to-downward-spiral.html "Britain’s bleak outlook sets sterling to downward spiral") hitting $1.3703 at 0946 GMT, its lowest since April 13. At 1050 GMT, cable was down 0.4% on the day at $1.3707. Versus the euro, the pound was down 0.2% at 85.89 pence. I think the pound is basically being influenced by general risk appetite as opposed to anything specifically geared towards the UK itself,” said Ned Rumpeltin, head of European currency [strategy at TD Securities](https://www.financedigest.com/security-trumps-obesity-in-britains-first-food-strategy.html "Security trumps obesity in Britain’s first food strategy"). Rumpeltin said that the pound looks vulnerable to further downside pressure due to low [risk appetite](https://www.financedigest.com/u-s-dollar-climbs-to-two-year-peak-as-risk-appetite-tumbles-yuan-drops.html "U.S. dollar climbs to two-year peak as risk appetite tumbles; yuan drops") and that he was watching $1.3670 as the level at which to reassess the currency’s outlook. [Britain has the seventh highest death toll in the world and is forecast to soon have more new infections each day](https://www.financedigest.com/britain-on-course-for-hottest-day-on-record.html "Britain on course for hottest day on record") than it did at the height of the second wave of the pandemic. But it is [ahead of its European](https://www.financedigest.com/european-stocks-slip-on-dour-german-sentiment-survey-ahead-of-powell-speech.html "European stocks slip on dour German sentiment survey ahead of Powell speech") peers in terms of vaccine rollout. “The world will be watching the U.K. experiment with huge interest,” wrote [Deutsche Bank](https://www.financedigest.com/citigroup-to-buy-deutsche-bank-license-in-mexico-for-wholesale-unit.html "Citigroup to buy Deutsche Bank license in Mexico for wholesale unit") strategist Jim Reid in a note to clients. It could show a pathway [back towards normality or it could be a warning to even heavily vaccinated countries that COVID](https://www.financedigest.com/fda-advisers-back-the-same-covid-vaccine-for-initial-shots-boosters.html "FDA advisers back the same COVID vaccine for initial shots, boosters") will be a problem for a decent length of time still. Positioning [data showed that speculators’ net long position on the pound](https://www.financedigest.com/dollar-slips-after-upbeat-china-data-euro-pound-rise.html "Dollar slips after upbeat China data; euro, pound rise") – bets that the pound will strengthen – was cut to its smallest since January 2021, in the week to July 13. ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/travel-1736838161011-compressed.jpg) Last week, two [top Bank of England officials surprised investors](https://www.financedigest.com/top-ten-biggest-mistakes-by-novice-investors-and-how-to-avoid-them.html "TOP TEN BIGGEST MISTAKES BY NOVICE INVESTORS – AND HOW TO AVOID THEM") by suggesting monetary policy might be tightened sooner than expected. For the week ahead, [retail sales](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") data and flash PMI surveys both on Friday, will be closely watched. A European [Central Bank](https://www.financedigest.com/analysis-china-central-bank-under-pressure-to-ease-is-hemmed-in-by-inflation-fed-jitters.html "Analysis-China central bank, under pressure to ease, is hemmed-in by inflation, Fed jitters") (ECB) meeting on Thursday is also in focus. Two weeks after unveiling its closely anticipated strategy review, the ECB will face questions on what its new 2% [inflation target](https://www.financedigest.com/the-mouse-that-roared-new-zealand-and-the-worlds-2-inflation-target.html "The mouse that roared: New Zealand and the world’s 2% inflation target") might mean for policy. (Reporting by Elizabeth Howcroft; Editing by Robert Birsel and Barbara Lewis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---