Pound Falls to 10-Day Lows on UK COVID-19 Cases, Risk-Off Mood

The Sterling pound today fell to new 10-day lows against the US dollar driven by the risk-off market sentiment amid rising UK coronavirus cases and the ongoing Brexit talks. The GBP/USD currency pair’s decline was also fueled by the resurgent greenback, which benefitted as a safe-haven asset ahead of next week’s US Presidential election.
The GBP/USD currency pair today fell from a high of 1.3025 during the early London session to a low of 1.2880 in the early American market but had recouped some of its losses at the time of writing.
The rising UK coronavirus cases fueled the currency pair’s initial decline as experts warned that the country was at a critical stage given that it is recording about 100,000 new cases daily. The pound was under pressure as analysts expect that the effect of a Brexit deal on the currency would be temporary at best as Brexit talks drag on. The release of the UK M4 money supply report by the Bank of England combined with the upbeat mortgage approvals data had a minimal impact on the currency pair.
The looming US election cast a shadow on the pound given that President Donald Trump, who is a close ally of Boris Johnson is trailing Joe Biden in most opinion polls. The release of the upbeat US jobless claims report and US Q3 GDP data pushed the cable to its daily lows.
The currency pair’s future performance is likely to be affected by Brexit news and US dollar dynamics.
The GBP/USD currency pair was trading at 1.2933 as at 20:07 GMT having fallen from a high of 1.3025. The GBP/JPY currency pair was trading at 135.31 having dropped from a high of 135.95.
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