- GBP/USD goes nowhere today.
- The stimulus pause in the US drags the dollar.
- Bulls waiting for August 18 Brexit talks, in a reluctant mood now
GBP/USD was trading around 1.3120 after it failed to capitalize on the earlier intraday jump and gave back nearly 40 pips from the highs in the European session today. The political impasse in Washington and weaker US Treasury returns helped in the early surge, on a weaker dollar. The Coronavirus vaccine optimism also dragged the dollar down as risk averseness abated.
The bilateral negotiations between the UK and EU over their future relations are in focus this week. The talks will resume on August 18 at Brussels and are happening in the backdrop of improved sentiments about its potential success. The mood was very much set by the comments last week by Britain’s chief negotiator David Frost that a Brexit agreement is possible by September.
The talks should underpin the pound in the absence of any other significant economic releases.
The hopes of a coronavirus vaccine and the postponement of the US-China trade deal review boosted the sentiments on the start of the new week. The review planned for Saturday didn’t take place as expected due to schedule issues; this kept the deal intact, at least for now.
The GBP/USD has established its range near 1.3100, and investors will be checking the Empire State Manufacturing Index today, in a day of limited US economic data releases.
However, the key focus will be the Brexit related headlines and the FOMC minutes available on Wednesday. These events will determine the way ahead for the GBP/USD pair.