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While shares have found their feet and the greenback is giving ground again, sterling may still stumble due to UK-related reasons, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“Daily COVID-19 deaths are on the rise once again, jumping to 545 in Tuesday’s report. The ongoing misery limits the government’s ability to lift the lockdown, weighing on the economy.” 

“David Frost, London’s Chief Negotiator, said that the EU is treating the UK as an ‘unworthy partner’ trying to bend it to EU norms, offering a low-quality deal. […] The ongoing tensions raise the chance that the UK exits the transition period without a trade deal, reverting to WTO rules, worrying investors.”

“Britain’s CPI fell to 0.8% yearly in April, worse than expected. The sharp fall in inflation raises the chances that interest rates fall below zero. That could weigh on the pound.”