- GBP/USD came under pressure on Thursday.
- Brexit concerns, new COVID-19 lockdown measures dragged on the pound.
- Risk-off trading boosted the safe-haven USD depressing the pair
The GBP/USD trended lower, paring gains from the previous session. Fresh covid-19 lockdown restrictions in the UK dragged on sterling. At the same time there was a strong pickup in demand for the US dollar. Rising covid cases and fading hopes for additional US fiscal stimulus measures prior to the US e election on November 3 dragged on the market’s mood sparking a risk-aversion trade, which boosted the safe-haven US dollar pressuring GBP/USD.
The pound was out of favour as the EU said the UK must make further concessions to move Brexit negotiations forward. After the first day of the EU summit, Michel Barnier, the EU’s chief negotiator said the level playing field, fisheries and issues of governance remained key issues preventing the talks from moving forward. UK chief Brexit negotiator, David Frost, criticised the EU saying that the EU is no longer committed to working intensively to reach a future partnership. GBP/USD declined sub1.2900 and remained weighed down from mixed US macro data.
GBP/USD settled at the lower end of its daily trading range and remained under pressure through the Asian session on Friday. UK Prime Minister Boris Johnson’s decision on whether the UK will leave talks or continue Brexit talks is in focus. This will drive sentiment surrounding the pound. US monthly Retail Sales data, later in the day will influence the USD price dynamics Industrial Production data and the preliminary estimate of the October Michigan Consumer Sentiment Index will then draw into focus.