GBP/USD Jumps Over 0.90%, Breaks Above 1.300

GBP/USD has finally managed to make a u-turn and shift from the bearish mood that coincided with ongoing anxiety over a potential no-deal Brexit. The pair has gained 0.94% as of 2:40 PM UTC, currently trading at 1.3114. Initially, the price broke above the psychological level of 1.300 in the European morning, which opened the door to fresh weekly highs. Thus, the pair has recovered more than one-third of the losses suffered in the dramatic decline, trading at the same levels right before the UK election.

Investors chose to ignore the worries about a no-deal Brexit. The topic has been dominant since the moment when UK Prime Minister Boris Johnson secured a major victory and announced his intention to reach a trade agreement with European leaders by the end of next year. Elsewhere, EU officials and markets expected the UK government to extend the deadline of the transition period beyond December 2020. However, the PM went as far as to make any such attempts illegal by law. The British parliament passed the second reading of the Withdrawal Agreement Bill (WAB) last Friday.

Economists are worried that Johnson’s move might lead to a no-deal Brexit, a scenario that could bring the most damages to the UK’s economy. As a result, the pound crashed about 3% against majors, including the USD. However, some of these fears eased in the wake of Christmas holidays, allowing the GBP/USD pair to recover some of the losses amid thin volumes.

It is likely that investors have reacted to recent comments from European Commission President Ursula von der Leyen, who suggested earlier today that Johnson should reconsider his refusal to extend the transition timeframe. Markets might regard her words as a hope that the EU won’t let a no-deal Brexit happen. The official told the French magazine Les Echos:

“I believe that it would be reasonable to review things in the middle of the year, if necessary to see if an extension is needed.”

Besides, the damaging effect on the pair’s latest bearish trend was intensified by a stronger dollar on US-China trade optimism. However, that sentiment is oversaturated as the USD has already priced in the outcome. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.