GBP/USD: Free Cummings, shackled sterling

GBP/USD has been on the back amid the Cummings’ scandal and the Brexit impasse. The cable is trading at 1.2272 with little space for the upside, according to FXStreet’s analyst Yohay Elam.

Read: Mixed technical picture leaves little room for cable gains

Key quotes

“The Conservative Party and a majority in the British public want Dominic Cummings – the PM’s powerful adviser – out. The affair cannot be seen as yet another political scandal, as it affects the willingness of the people to cooperate with lockdown measures.” 

“Britain reiterated its refusal to prolong the transition period, raising the chances of trading at World Trade Organization terms in January. Talks with the EU have hit an impasse.” 

“Andrew Bailey, Governor of the BoE, wrote an op-ed for the Guardian in which he kept the door open to setting negative interest rates. However, his tone showed that such a move is not imminent. That is somewhat supporting sterling.”

“Investors are shrugging off Sino-American tensions – ranging from Xinjiang to Vancouver, where the CFO of Huawei faces extradition to the US. The reason for the lack of grave concern is that the world’s largest economies want to keep the trade deal intact.”