GBP/USD: Cable Drops as Trump Calls Coronavirus Press Conference

The British pound is down against the US dollar on Wednesday with the British currency losing out due to flaring tensions with the European Union and some disappointing retail data. The dollar is keeping its role as a haven during the coronavirus outbreak despite economic data from the United States starting to sour.

GBP/USD was lower by 63 pips (-0.48%) at 1.2935 with a daily price range of 1.291 to 1.301 as of 2pm GMT. The currency pair reached the 1.30 level on Tuesday afternoon but has since rolled over, erasing most of Tuesday’s rise. The exchange rate is -0.27% on the week.

GBP down amid EU-UK trade negotiations

Having been the strongest currency on Tuesday, traders in the British pound have flipped the script making it the weakest currency by Wednesday afternoon. The whipsaw price action is likely as traders leave the pound in a sideways range until further developments on EU-UK trade negotiations. EU Chief Negotiator Michel Barnier made some remarks after the release of the EU negotiating mandate yesterday that suggest some irritability at recent statements from the UK.

In a low-key economic calendar this week, traders were watching the British Retail consortium (BRC) Shop Price Index, a measure of price changes in popular retail outlets, which dropped -0.6% when a smaller drop of -0.3% was forecast.

USD high as Treasury yields bounce back record lows

As the COVID-19 outbreak wreaks havoc across financial, US President Trump has announced he will hold a press conference on the topic at 11pm GMT. Other officials have said the United States is well protected from the disease. White House National Economic Director Larry Kudlow said, “We have contained this, I won’t say airtight but pretty close to airtight.” The comments were slightly at odds with the White House request to Congress for $2.5bn to fight the coronavirus, although the funding can be argued as preventative given there are still relatively few known cases in the United States.

The dollar has benefitted as 10-year Treasury yields bounced back off record lows. US consumer confidence data missing expectations and the implied downbeat implications for the US economy saw the yield on 10-year Treasuries fall to a record low on Tuesday.

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