Breaking: GBP/USD crashes nearly 300 pips on covid strain panic, supply chain chokes

The new COVID-19 strain raging in London has prompted travel bans from most of Europe. France went further with a ban on freights, causing disruptions to supply chains ahead of Christmas.

The travel restrictions follow Britain’s decision to set new Tier 4 curbs on London and the Southeast, following the fast-moving spread. All but the most essential shops are open in one of the world’s financial capitals. 

Update: GBP/USD has been extending its losses, hitting 1.3233 at the time of writing. The move is unrelated to the dollar, which has been edging lower against the euro and other currencies at the same time. EUR/GBP has surged above 0.92, also reflecting the pound’s weakness. UK Prime Minister Boris Johnson is convening his emergency Cobra cabinet to deal with supply chain issues and perhaps additional measures. For more: GBP/USD Forecast: New covid strain bans sterling from surging, Boris’ actions, Brexit eyed

The virus mutation is spreading faster than previous versions, as much as 70% more transmissible. So far, there is no evidence that this covid variant is more deadly nor vaccine-resistant. 

GBP/USD has tumbled down some 250 pips on Monday, trading hitting a low of 1.3265 after closing at 1.3521 on Friday. It entering oversold conditions on the four-hour chart. 

Sterling is also suffering from the lack of progress in Brexit talks, ten days before the transition period expires. The EU and the UK continue talks in Brussels and fisheries remain the main point of contention.