GBP/USD: The Brexit sage is having a growing impact on the pound

GBP/USD is trading around the lowest in seven weeks. Brexit, speculation about BoE rates, and mismanagement of coronavirus are weighing, as FXStreet’s analyst Yohay Elam notes.

Key quotes

“Both EU Chief Negotiator Michel Barnier and his British counterpart David Frost acknowledged difficulties in talks. Brussels wants the UK to agree to accept EU rules in return for easy access to the single market, while London rejects the idea.” 

“PM Boris Johnson’s government has repeatedly rejected prolonging the implementation period beyond year-end. Investors fear that the UK would default to WTO rules – unfavorable terms.”

“Andy Haldane, Chief Economist at the BoE, left the door open to negative interest rates and to other steps in an interview over the weekend. The BoE may first opt to expand its QE program, pledging to buy an additional £100 billion worth of bonds, according to a Bloomberg survey.”

“The sterling is also suffering from the UK’s ongoing lockdown – and issues of getting out of it. The contact tracing application that is tested on the Isle of Wight has had issues while concerns about safety at work have also been present in the UK press.”