Focus in the foreign exchange markets has shifted on the United Kingdom and the British Pound, a week prior to the 21st of June, when the final restrictions are expected to be lifted. However, the decision on whether to go on as planned and ease restrictions may be stalled in this week’s meeting between the UK government. To add on, economic data are set to be released on Tuesday, Wednesday and Friday. 

The UK has been struggling with an increase of coronavirus cases and hospitalisations due to the Indian variant, which spreads faster. As a result, the final restrictions lifting may be postponed for the time being to minimise the spread. FX strategist Jordan Rochester said, “A delay is possible, but a reason to sell GBP as a result appears lacking.” British Prime Minister Boris Johnson will announce the decision on Monday. 

As a result, the Pound-to-Euro exchange rate started the week at 1.1660, whilst the Pound-to-Dollar exchange rate stands at 1.4111. “We think the impact of a delay on GDP growth would be limited, provided it is short and that restrictions are not reimposed on retail and hospitality,” Chief UK economist Andrew Goodwin noted. Several reports are suggesting that Johnson’s government will delay “freedom day” by two or four weeks