GBP/USD: Acceleration in new US coronavirus cases lifts the dollar

GBP/USD has been attempting to recover amid hopes for a Brexit breakthrough, which is not expected to offset the disappointing US coronavirus data that is boosting the greenback, FXStreet’s analyst Yohay Elam informs.

Key quotes

“The Financial Times is reporting that the EU is ready to compromise with the UK on the sensitive ‘level-playing field’ issue – aligning regulations across the channel after the current transition period expires. Talks between London and Brussels resume on Monday as the clock ticks down toward year-end. After four rounds of inconclusive talks, any hope helps the pound. Is it enough to push GBP/USD higher? Probably not. Investors will believe it when they see it.”

“In the US, coronavirus seems out of control and may further weigh on markets – boosting the safe-haven dollar. COVID-19 cases, hospitalizations, and deaths have risen in recent days, especially in the south. While governors have urged people to stay at home and wear face-masks in public, they have refrained from imposing restrictions. Such a move would further weigh on markets.”

“Several economic updates from the world’s largest economy are also set to shape trading. The final read for first-quarter GDP will likely confirm the 5% annualized contraction, fueled by the falling consumption. Shoppers returned in May, the period for which Durable Goods Orders are released, and they will likely show a bounce. Weekly jobless claims are also eyed. It is essential to note that continuing claims statistics are for the week ending on June 12 – when Non-Farm Payrolls surveys are held.”