GBP/USD drops to 1.2894, down 0.15% intraday, while heading into Friday’s London open. In doing so, the sterling keeps the previous day’s downbeat performance amid Brexit and the coronavirus (COVID-19) woes ahead of UK PM Boris Johnson’s speech. Also weighing the quote could be the US dollar’s safe-haven demand backed by increasing odds of no stimulus ahead of presidential elections.
BoJo to keep the show on…
The previously hailed October 15 deadline for Brexit talks passed without any deal, as widely anticipated, with the European Union (EU) and the UK policymakers showing readiness to extend talks. EU’s chief negotiator Michael Barnier said he is ready for Brexit talks “until last possible day” whereas his British counterpart blamed the regional leaders for the current deadlock.
With no chatters over closing the departure talks, macro forecasts favor UK PM Johnson to strike a bit softer tone while accepting the EU authority. Although the Tory leader isn’t likely to relinquish controls over fisheries, the bloc’s demand for a “level playing field” may be considered with a tailor-made approach. Identifying this, Goldman Sachs said, as per Reuters, “There could be drama at the EU summit over Brexit but that a thin Brexit trade deal was likely to strike by early November.”
The COVID-19 conditions are getting worst with daily counts reaching closer to the 20,000 threshold, 18,980 new cases, 138 deaths marked in the latest report published on Thursday. On the other hand, “US cases of the novel coronavirus crossed 8 million on Thursday, rising by 1 million in less than a month, as another surge in cases hits the nation at the onset of cooler weather,” said Reuters.
The pandemic has already recalled tough local lockdowns in Spain, France, Germany, and northern England. Though, the latest of Manchester makes, coupled with Friday’s start of lockdown in London, will result in half of Britain off due to the deadly virus.
Other than the Brexit and virus, the American Congress’s inability to provide the much-needed stimulus also weighs on the risk-tone. In the latest update during the “town hall” style question and answer session, US President Donald Trump tried to renew hopes of a stimulus before the election but failed. The same efforts were done earlier by US House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell.
GBP/USD LONG (Buy)
ENTER AT: 1.2931