- Brexit worries affect the GBP/USD exchange rate.
- Risk mood turns negative, USD in demand.
GBP/USD closed on Friday near the lower end of its daily trading range around 1.3020. The pair witnessed selling as Brexit-deal discussions between the UK and EU wasted time without much progress while the pandemic-driven lockdown measures added to the bearish weight on the GBP/USD.
The developments surrounding coronavirus and the Brexit deal more than cancelled the positive uptick from the US dollar weakness. During the European session, the pair went up a bit as traders followed the progress in the US stimulus talks keenly; the upbeat mood following the first approved coronavirus treatment put the safe-haven status of USD in less demand.
The dollar weakness was also fuelled by the expectations of a strong democratic victory in the November elections.
Meanwhile, Brexit discussions made some progress in competition guarantees, including state aid rules; but fishing remained a sore point. The UK is batting for regaining control over its waters while the EU wants to continue their access. EU chief Brexit negotiator had earlier warned that there would be no trade deal without finding an agreement on fisheries.
The second wave of coronavirus is also worrying the investors over its potential impact on the fragile global economic recovery. Also, the lukewarm progress in the US stimulus discussions affected the risk sentiments at the start of a new trading week today.
GBP/USD trades above 1.3000 during the Asian session today and will await the release of New Home Sales data from the US later in the day. The economic docket is light otherwise, and the news surrounding Brexit, the pandemic, and the US stimulus will continue to dictate the pair in the day ahead.