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The last week was one for the history books – GBP/USD bulls emerged on top amid the long US elections process and central banks that tried to compete. Further ricochets from American politics and the UK GDP stand out this week while covid concerns could creep back, Yohay Elam, an Analyst at FXStreet, reports.

Key quotes

“The lockdown has just begun, but many Brits are asking when it will end. The official date is December 2, in time for Christmas. However, PM Johnson will base his decision on the data and will want to see the curve bending down, not only flattening. Moreover, figures about hospitalizations and deaths would need to flatten and fall.” 

“Brexit talks continue in full force ahead of the self-imposed goal of sealing a deal by mid-November – which is roughly the end of the week. Sterling remains sensitive to comments by the Chief Negotiators – the EU’s Michel Barnier and the UK’s David Frost. The only genuine cut-off date is year-end when the transition period expires.” 

“The BoE’s Bailey will have another opportunity to move markets, and so will Chief Economist Andy Haldane and other officials due to speak throughout the week. While the QE decision has been settled, any hints about negative rates will be closely watched. Sterling has room to rise if officials signal it is not imminent and fall if they convey a message of urgency.”

“The top-tier event of the week comes on Thursday – Gross Domestic Product statistics for the third quarter. After a plunge of 19.8% in the second quarter, a substantial rebound is likely. Similar publications in Europe and the US surprised to the upside. GDP figures for September are also of interest.” 

“Trump is unlikely to concede, and the words of McConnell are critical. If the Senate Majority Leader acknowledges such an outcome, it could provide calm. However, if Republicans close ranks behind Trump’s unsubstantiated claims, the greenback could surge in a flight to safety move.”

“Once the dust from the elections settles – and it is unclear when that happens – coronavirus could return to the forefront. Cases have hit record levels above 100,000 daily, and mortalities are also on the rise. So far, the Fed’s virus concerns have been seen as an indication of more stimulus, but the economic damage has yet to be factored in. Updated statistics and potential restrictions could boost the dollar.”