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GBP/USD has jumped above 1.29 after UK PM Johnson intervened in Brexit talks but doubts about a breakthrough, Trump’s coronavirus and Nonfarm Payrolls could bring the cable back down, Yohay Elam, an analyst at FXStreet, reports.

See – Non-Farm Payrolls Preview: Nine major banks expectations for September jobs report

Key quotes

“The news of the PM’s intervention triggered hopes for a Brexit breakthrough and boosted the pound. However, there are reasons to doubt that sterling would hold onto these gains. Johnson’s move comes one day after von der Leyen announced legal action against the UK. Will the British leader cede ground to the bloc? That happened last year when he agreed to allow for a customs border on the Irish Sea.  However, the IMB violates that concession, and the EU will likely be more skeptical. Moreover, the telephone call takes place when markets are closed, and investors may prefer to refrain from taking risk ahead of the weekend.”

“Around six months after Johnson told the world he has coronavirus, President Donald Trump tweeted a similar message, adding to uncertainty ahead of the elections and supporting the safe-haven dollar. Trump was diagnosed due to exposure to his aide Hope Hicks and is reportedly doing perfectly well. Nevertheless, Trump is 74 years old and is overweight, thus being at higher risk. His rival Joe Biden is older and both men shared the same stage at the presidential debate on Tuesday. Uncertainty about the elections and also the fiscal stimulus package have substantially risen.”

“On Thursday, Republicans and Democrats failed to reach an agreement on the next relief deal. Friday’s Non-Farm Payrolls report may push lawmakers into action, especially as it is expected to show a slowdown in job growth. Economists expect an increase of around 850K positions in September and a minor drop in the unemployment rate from 8.4% to 8.2%. On the other hand, figures leading toward the publication beat estimates, opening the door to an upside surprise, lifting the dollar.”