GBP/EUR: Pound Tumbles As PM May Clings To Power
  • GBP/USD struggled over 1.30 on Brexit fears.
  • Trump health and US fiscal stimulus are in focus
  • Tuesday’s four-hour chart is bullish, 1.30 remains a challenging target.

Maroš Šefčovič – the Vice-President of the European Commission highlighted the lack of trust which is reflected in Britain´s Internal Market Bill and insisted that the full implementation of the Withdrawal Bill was not optional or debatable. Given his knowledge of Brexit talks and he has influence over sterling.

His comments sent GBP/USD lower from 1.30. Chief EU Negotiator Michel Barnier is in London for further trade talks. Further comments from the EU and the UK are expected and will likely move the Pound.

Rising COVID-19 cases in the UK is adding pressure to the Pound. Fears are growing that London could see restrictions tighten or even a lockdown to stem the spread of the virus. An Excel glitch meant  16,000 cases were missed -yet another embarrassment for Prime  Minister Boris Johnson’s government. Any tightening of restrictions could drag on the Pound.

In the US, President Donald Trump was discharged from hospital and returned to the White House, although his doctors say he is not completely out of the woods yet.

Joe Biden is now leading in the polls by a significant margin of 8% nationally and also holds the lead in key battleground states. A Monmouth poll for Pennsylvania on Tuesday will be closely eyed.

Fiscal stimulus is almost more in focus than the elections. Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin will speak again as talks continue. Cautious optimism is growing that the two sides will be able to agree a stimulus deal,particularly given that the US economic recovery appears to be slowing.

Federal Reserve Chairman Jerome Powell is due to speak about the economy later today. The Fed Chair is likely to reiterate the pledge to keep rates near 0 until 2023. However, he is unlikely to commit to additional; bond buying with the US elections so close.

Politics remain the key focus.