Pound Plunges to 4-Week Lows on Brexit Jitters, Rising COVID-19 Cases

The Sterling pound today fell to new 4-week lows against the US dollar given the empty UK docket and the prevailing risk-off market sentiment, which favoured the dollar. The greenback’s rally triggered the GBP/USD currency pair’s crash amid a confluence of negative factors that weighed on the pound, including fears of a no-deal Brexit.
The GBP/USD currency pair today fell from a high of 1.2436 in the Asian session to a low of 1.2314 at the opening of the American markets but was slightly off these lows at the time of writing.
The currency pair initially traded sideways during the Australian session extending yesterday’s sideways action. The pair kept falling despite Chancellor Rishi Sunak commenting that the UK was out of the acute phase of the economic crisis during an interview with Bloomberg TV. Investors were also worried about a second lockdown in the US, which dampened investor risk appetite boosting safe-haven assets. The lack of tangible progress on the post-Brexit trade deal amid ongoing negotiations as investors worried about the increasing likelihood of a no-deal separation.
The selloff in US equities caused investors to pile into the greenback, pushing the US Dollar Index to a high of 97.68. Investors ignored the rally in US Treasuries causing 10-year bond yields to fall to a low of 0.641%. The mixed US personal consumption expenditures report released by the Bureau of Economic Analysis also drove the pair lower.
The cable’s performance over the upcoming weekend is likely to be affected by geopolitical events and USD dynamics.
The GBP/USD currency pair was trading at 1.2340 as at 18:20 GMT having fallen from a high of 1.2436. The GBP/JPY currency pair was trading at 132.28 having dropped from a high of 133.25.
If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *