The market bloodbath is over – for now – and that is helping the dollar recover. GBP/USD has dropped below 1.31 after touching 1.32 on Monday, but this fall is for the wrong reasons, according to Yohay Elam from FXStreet.
“The situation in the US is seemingly better, with fewer than 1,000 reported infections. However, the pace of testing is picking up only gradually and Trump’s playing down of the disease fails to provide confidence.”
“There is a glimmer of hope from the upcoming UK budget due out on Wednesday. Chancellor Rishi Sunak is scrambling to provide additional spending to mitigate the disease and keep the economy running. And that could boost the pound.”
“The difficulties that EU and UK reported seem to be priced in by the pound, and there is still ample time for talks to run.”