GBP/USD was fighting not to fall below the lower range of 1.3080 – 1.3100 after bears tried to extend the Friday losses, ahead of the London open.
The pair has been weighing the positive report from the City of London economists predicting a record-breaking economic growth in the third quarter; and the stalling of Brexit talks on Friday with the UK government checking out emergency plans for coronavirus resurgence along with a no-deal Brexit.
GBP/USD was trading near 1.3087 ahead of the UK open today. The early gains quickly erased as the pair was trading range-bound in a quiet session. The economic growth optimism could arrest the bearishness stemming from Brexit pessimism and the dollar strength.
There is no significant data release slated for today and traders will be focused on the risk catalysts for new triggers.
Further clarity on the emergency-plan news came from the Sky news report – the scenario of a deal-less Brexit along with the resurgence in coronavirus was drawn up in July. The scenario building was part of an exercise to be prepared for all eventualities that Britain could face – the news quoted an anonymous source as saying.
The fears of no-deal Brexit have gained momentum, especially after the failure of the talks on Friday. The probabilities of a second-wave of coronavirus, however, receded as the latest count came in at 1,041 new cases on Sunday, down from 1,288 on Saturday, Reuters reported.
The Small and Medium Enterprises (SMEs) were showing cautious optimism at the start of the third quarter, with a reading of 95 in Barclaycard Payments’ SME Barometer. A Financial Times report also suggested that Britain might enjoy a record-breaking growth in the third quarter, after spending emerged after the lockdown. The story was based on a government analysis.
Vaccine hopes pushed the S&P 500 Futures to trade above 3,400 – a record level and also pushed the Asia-Pacific market higher. But, the US Treasury yields were down 1.2 basis points to 0.628 Percent. Tropical storms Marco and Laura haven’t yet impacted the markets.
There might not be much activity today without any significant releases on the cards. The US Chicago National Activity Index could add some action later and news about the Fed before this week’s Jackson Hole Symposium will be watched along with the pandemic updates.
