The British pound today fell against the much stronger US dollar as markets waited for a fiscal stimulus package to be announced by the US government. The GBP/USD currency pair was also weighed down by British politics as the government gave up its massive majority in a crunch vote on Huawei.
The GBP/USD currency pair today fell from an initial high of 1.3088 to a low of 1.2899 in the American session and was near these lows at the time of writing.
The currency pair has been under pressure since yesterday as Boris Johnson‘s government seems not to be doing enough to contain the coronavirus outbreak. The government has encouraged people to self-isolate, including travellers at a hotel near Heathrow Airport, but reports indicate that the policy might be failing. The pair sunk to its daily lows after the government won a crucial vote on Huawei in the House of Commons by a slim majority as some MPs revolted. It appears that Boris might be losing the support of some MPs in the Conservative Party, which might negatively affect future legislation.
Investor expectations that Donald Trump‘s administration will announce major fiscal stimulus measures during the briefing scheduled for 21:30 GMT also drove the pair lower as the US Dollar Index rallied to a high of 96.40.
The currency pair’s future performance is likely to be affected by tomorrow’s UK GDP report and the US inflation data.
The GBP/USD currency pair was trading at 1.2898 as at 18:52 GMT having fallen from a high of 1.3088. The GBP/JPY currency pair was trading at 135.79 having dropped from a high of 137.21.
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