GBP/USD has been edging lower as the UK is currently refusing to resume Brexit talks while PM Johnson is set to decide on putting Manchester under stricter restrictions. Boris is set to break the bull/bear balance with these two decisions, Yohay Elam, an Analyst at FXStreet, reports.
Key quotes
“The UK government said that talks with Chief EU Negotiator Michel Barnier were constructive, but there was still no basis to resume official negotiations. The neverending saga will have to end at the end of the year when the transition period expires. Until then, headlines are set to rock the pound. If Prime Minister Boris Johnson agrees to hold official talks, sterling could shine.”
“Cases are rising rapidly across the UK, and Wales announced a strict lockdown. In England, Liverpool is under Tier Three limits and London under Tier Two. The fate of Greater Manchester is set to be decided later on Tuesday amid a clash between mayor Andy Burnham and the central government. Johnson is on course to impose new rules – with or without consent. Apart from economic harm, the clash is costing the PM political capital. An orderly entry of Manchester into Tier Three would be better for sterling than ongoing bitterness.”
“The next US coronavirus stimulus package is high on the agenda for markets – and optimism on this topic has been weighing on the safe-haven dollar. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have reported progress, but they have yet to agree on all the topics. Moreover, any bill would have to pass the Republican-controlled Senate, which is reluctant to approve significant spending.”
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