- Pound (GBP) slips towards US$1.27 as British government assumes that a post Brexit trade deal will not be reached
- US – UK trade talks are going smoothly although no deal expected before the US elections
- US Dollar (USD) trades flat as Republicans and Democrats struggle to reach an agreement over relief package
- US reaches a total of 4 million coronavirus cases
The Pound US Dollar exchange rate (GBP/USD) is moving lower on Wednesday, snapping a three-day running streak. The pair settled on Tuesday +0.5% at US$1.2731 after hitting a 6-week high of US$1.2768.
At 06:15 UTC, GBP/USD trades -0.1% at US$1.2720, at the lower end of the daily traded range.
Reports that the British government is close to abandoning a post Brexit trade deal with the EU are unnerving Pound investors. The British set July deadline is drawing closer and the British government expects to trade on unfavourable World Trade Organisation terms when the transition period ends on December 31.
Negotiations remain deadlocked on fishing rights, the European Court of Justice’s role and the so called level playing field. Failure to reach an outline agreement by the self-imposed end of July deadline could see the UK crash out of the single market and customs union without a trade deal in place.
Meanwhile US – UK trade talks are reportedly going smoothly although no trade deal is anticipated before the US Presidential elections.
He US Dollar is holding steady heading towards the London open after falling against most major peers in the previous session. Concerns are rising that the Democrats and the Republicans are struggling to reach an agreement over the next round of US stimulus measures to boost the US economy.
The Republicans and the Democrats remained far apart as they discussed how much should be spent on the next round of stimulus. The Republicans proposed a $1 trillion package whilst the Democrats are backing a $3 trillion relief bill.
Coronavirus numbers remain a concern in the US as the total reaches a grim 4 million milestone. The number of daily new cases has eased back slight to 60,000, down from 70,000.