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GBP/USD has bounced ahead of an emergency EU-UK meeting. Brexit news is set to overwhelm coronavirus headlines and other developments, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“The EU is angered with a draft bill presented to the British parliament that violated the Brexit Withdrawal Agreement – and may press charges against the UK. Both sides agreed to hold an emergency meeting on Thursday in London.” 

“The setback in what was already agreed upon comes as negotiations on future relations continue but remain deadlocked. The bloc’s officials are calling for the legal text to be withdrawn and seem to want to convey this message also face to face. However, it is unlikely that Johnson will instantly change his mind – and there is a good chance that talks collapse. In that case, the pound could fall back down.”

“Coronavirus cases are rising on both sides of the Channel, and the UK introduced new rules limiting gatherings to six people and slapping fines for those who violate it. Moreover, the government is investing funds in an ambitious plan of rapid COVID-19 tests, that may help Britain return to normal activities.” 

“President Donald Trump acknowledged he played down the severity of the virus early on. While he trails rival Joe Biden in the polls, Americans still give him good marks on the economy. A test of the US recovery is due out on Thursday – jobless claims, which are projected to extend their gradual downfall from the highs.”