GBP/USD: US coronavirus record and frosty Brexit relations care sterling

There are reasons to worry about the pound such as EU-UK tensions and factors favoring the safe-haven dollar like the surge in US coronavirus cases which is set to continue weighing on sentiment, FXStreet’s analyst Yohay Elam informs.

Key quotes

“’Some of the EU’s unrealistic positions will have to change if we are to move forward’ – David Frost’s frosty comments have added to the pessimism about Brexit talks and are weighing on the pound. Michel Barnier, his opposite number in Brussels, sees a real breakthrough coming only in October.” 

“US coronavirus daily infections neared 40,000, a record. While mortalities are trending lower, concerns that health systems will be unable to cope have led Texas to halt its plans to reopen the state’s economy. The Center for Disease Control (CDC) warned that maybe 23 million Americans were infected, ten times the official figures but President Trump insisted that the US economy will not shut down but rather roar forward.” 

“Personal Spending and Personal Income figures for May are due out on Friday and will be of interest, competing with coronavirus statistics. Stock markets staged a late rally on Thursday but investors may prefer to take bets off the table ahead of the weekend.” 

“The Fed requested banks to refrain from buyouts and dividends in order to preserve their strength amid rising uncertainty. That may also weigh on sentiment.”