- GBP slips despite Brexit and covid-19 optimism
- PM Boris Johnson faces questions on top aide Cumming’s lockdown movements
- US – Sino tensions rise with Trump promising a response to China’s HK crackdown
- At 07:00 UTC, GBP/USD is -0.2% at US$1.2308 >> Real time exchange rate
After two consecutive days of gains the Pound is edging lower versus the US Dollar. The Pound US Dollar exchange rate surged on Tuesday, settling +1.1% at US$1.2333, just off the 2 week high reached earlier in the session.
At 07:00 UTC, GBP/USD is trading -0.2% as it heads back towards US$1.23 on broad US Dollar strength.
The Pound is easing back after an impressive rally on Tuesday, although optimism surrounding Brexit and a coronavirus drug could help to underpin sterling.
Chief EU Negotiator Michel Barnier is said to have agreed to drop demands to unchanged access to fishing grounds around the UK, one of the sticking points in trade talks. The softer stance from the EU could be the start of more concessions from both sides, planting a firmer path to a trade deal agreement ahead of talks next week.
With nothing on the UK economic calendar of interest investors will continue to watch developments in the Cummings crisis. Boris Johnson is struggling to draw a line under the crisis and will face further questioning on his top aides’ movements in lockdown.
Also underpinning the Pound is news that the drug Remdesivir, which appears to shorten the recovery time from coronavirus, will be made available on the NHS.
The US Dollar is trading with a positive bias, owing to its safe haven properties, as tensions between US and China return to centre stage. With no high impacting data on the US economic calendar, investors have turned their attention to cooling US – Chinese relations.
US is considering a range of sanctions to punish China for its manhandling of the Hong Kong legal system and more broadly for its crack down on liberties in the financial hub. Trump is considering declaring that the former colony has lost its autonomy from China.
Trump is expected to unveil a response by the end of the week as the President comes under mounting pressure from both Republicans and Democrats to respond firmly. China has threatened to respond to sanctions, boosting demand for the safe haven greenback.
