- GBP/USD experienced volatility in the European session on Wednesday.
- Brexit-related headlines continue driving movement in the Pound
The GBP/USD extended losses from the previous session in early trade on Wednesday. GBP was dragged lower on concerns over the economy from tighter coronavirus restrictions and potential negative interest rates from the Bank of England. The sell-off gained momentum in early in the European session amid reports that insufficient progress had been made in Brexit talks to say that a trade could be achieved.
GBP/USD struck a weekly low of 1.2862 but lacked follow through. This was followed by short-covering lifting GBPUSD 1.2975-80 The 110 pip rally came following positive Brexit suggesting that the UK government will not walk away from Brexit talks immediately. The UK will reportedly continue negotiations with the European Union on their future relationship beyond Prime Minister Boris Johnson’s October 15 deadline. The charge higher quickly tired and the pair is now stable around 1.2930-35 .
Brexit will continue to drive movement in the Pound. The US PPI figures will be in focus later in addition to speeches by FOMC members