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Bloomberg
The pound declined to the weakest level in a month on concern a lockdown across England would deal a painful blow to an economy already reeling from similar measures earlier this year.
Sterling fell as much as 0.7% to $1.2855, the lowest since October 7, after Prime Minister Boris Johnson announced the month-long restrictions amid concern that the coronavirus is spreading rapidly.
Bloomberg Economics said the second lockdown will mean the economy contracts in the fourth quarter and that the BOE will increase its asset purchase target this week by possibly more than the $129 billion previously forecast. The central bank will decide on policy on November 5, the same day the latest lockdown measures come into effect.
Despite the decline, the pound could rise into end of week — particularly if Democratic nominee Joe Biden emerges victorious in US presidential election, said Jordan Rochester, a currency strategist at Nomura International Plc. He sees sterling potentially rising as high as $1.35, a gain of nearly 5%, by the weekend.