- Good news from a trusted scientist predicting an end to the UK’s COVID-19 epidemic within weeks.
- GBP, however, while so far holding at critical support, could be back on the backfoot according to fundamentals.
A Nobel laureate scientist and professor, Michael Levitt, of Stanford University predicts that the UK will be rid of COVID-19 within weeks, a piece in the UK’s Telegraph reports.
“Lockdown caused more deaths than it saved”, he predicted.
The statements come from a man who correctly predicted the initial trajectory of the pandemic, sent messages to Professor Neil Ferguson in March telling the influential government advisor he had over-estimated the potential death toll by “10 or 12 times”, the article says.
The Imperial College professor’s modelling, a major factor in the Government’s apparent abandoning of a so-called herd-immunity policy, was part of an unnecessary “panic virus” which spread among global political leaders, Prof Levitt now tells the Telegraph.
GBP/USD outlook
Sterling has been on the back foot as both Brexit and a prolonged case of the flu weighs.
Analysts at Rabobank explained, “in view of its high mortality rate, the UK is being slower than many other countries in Europe to unwind its lockdown measures. This threatens to enlarge the toll on the economy which in turn places further pressure on policymakers, both fiscal and monetary.”
The Bank of England was poking the bears through its cage with a stick last week when making clear that negative interest rates have not been ruled out whilst the UK’s public sector borrowing ballooned in April.
GBP/USD started the week off well but soon came back under pressure, reversing a large portion of the gains made towards the 1.23 handle. The price has made a 61.8% retracement of the prior bullish correction.
At this juncture, bulls need to get above 1.2240 for a shot at the 1.2330s. Failing a break higher, a continuation of the downside is compelling.
“The combination of these factors leaves GBP very exposed and consequently, we have revised down our GBP forecasts,” analysts at Rabobank explained. “We now target GBP/USD1.19 in 1 month and GBP/USD 1.18 on a 3-month view. We had previously targeted GBP/USD1.19 on a 3-month view.”
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