GBP/USD has failed to convincingly break above 1.30 amid fresh Brexit fears. Trump’s coronavirus and US fiscal stimulus are set to rock the pound as well, Yohay Elam, an analyst at FXStreet, reports.
Key quotes
“Maroš Šefčovič is impacting the pound in an adverse manner. The Slovak politician said that Britain´s Internal Market Bill is a ‘heavy blow to trust’ and that full and timely implementation of the Brexit Withdrawal Deal is ‘not debatable.’ As the Vice-President of the European Commission for Interinstitutional Relations, he has knowledge of talks and influence on sterling.”
“Chief EU Negotiator Michel Barnier is in London for fresh talks, following fresh impetus from leaders. The silence was bliss for the pound – until it ended. Additional comments by politicians on both sides of the Channel are set to rock the currency.”
“Sterling is also suffering from rising COVID-19 cases in the UK, with concerns that London may undergo harsher restrictions and perhaps a lockdown. An Excel error was responsible for the omission of some 16,000 cases from the register, serving as another embarrassment for PM Boris Johnson’s government. Any announcement of further measures could weigh on the pound.”
“On the other side of the pond, President Donald Trump left the hospital and made a triumphant comeback to the White House. Despite the Commander in Chief’s defiant message – and ceremonious removal of his face mask – his doctors said he is not out of the woods.”
“Investors seem to focus more on fiscal stimulus than the elections, at least for now. Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin will speak again after a long phone call on Monday. Markets are cautiously optimistic that Democrats and Republicans can bridge the gap and sign off a multi-trillion relief package. Recent signs have shown that recovery is slowing down.”
“Jerome Powell, Chairman of the Federal Reserve, will speak about the economy later on. While he will likely reiterate the pledge to keep rates at zero for the next couple of years, the world’s most powerful central banker is unlikely to commit to additional bond buying. Powell would be reluctant to intervene four weeks ahead of the elections.”
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