- GBP/USD bounces off multi-year low amid broad US dollar pullback.
- Expectations of aggressive measures form the UK Chancellor offer additional help.
- UK Brexit Chief isolates himself on coronavirus concerns, the US COVID-19 headlines are also gloomy.
Having lost 1,800 pips in the last nine-days, GBP/USD recovers 1.55% to 1.1666 while heading into the London open on Friday. The pair follows the footsteps of other major currency pairs amid the US dollar’s retreat from three-year high whereas calls of a heavy stimulus from the UK diplomat add to the risk reset.
Earlier in Asia, the Cable pair slumped to the fresh low since 1985 following disturbing coronavirus reports from the US and the UK. However, the trade sentiment recovered afterward as traders appreciated the British Chancellor’s upcoming stimulus.
Also favoring the risk-tone could The Guardian’s news that a massive effort is underway to develop a UK vaccine for coronavirus within months and make it available to save lives before the end of the year. Talks of Gilead’s Remdesivir medicine is being tested also took rounds during the late-Thursday.
Coronavirus cases jump 643 to 3,269 during the last 24 hours in the UK but the isolation of the Brexit Chief David Frost got major attention. The reason being his counterpart in the European Union (EU), Michel Barnier, also got the flu-like deadly disease and puts a question mark on the further Brexit negotiations.
While portraying the risk-tone, the Asian stocks follow the foot-steps of Wall Street’s recovery whereas the US 10-year treasury yields also rise to 1.158% by the press time.
Given the lack of major data, coupled with the recent U-turn in the US dollar, investors will seek positive clues to hold onto recovery gains.
Technical Analysis
Buyers will need to conquer the year 2019 low near 1.1960 to avoid fears of revisiting the sub-1.1400 area.
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