Since Donald Trump stated that some trade restrictions on Chinese goods could return, tensions between the U.S. and China escalated
In a reaction, investors began to buy dollar as safe haven.
The British pound dropped against the US dollar in 0,6% on Monday, and on top of that entered a month, in which it typically subsides. Yet, analysts consider it rather a temporary phenomenon, as April positions show market is turning rather bullish on the pound.
During last weekend, the U.S. intensified its criticism against China for having failed to implement adequate protective measures to prevent, or at least slow down, coronavirus outbreak from spreading globally. “And of course U.S.-China trade tensions affected the pound rate,” said Kenneth Broux, FX strategist at Societe Generale.
Investors are buying dollar as a safe haven. Partially, the prevailing uncertainty around the future of UK economy made in impact. Great Britain seems to be dealing with the coronavirus pandemic much worse than other European countries, e.g. Germany. And similarly, there’s still a degree of uncertainty around Brexit and future relations with the EU.