- GBP weighed down by multiple factors.
- EUR/GBP gaps up.
- US dollar demand weighs on EUR/USD.
The abrupt and severe lockdown imposed in London and southeast England by the UK Prime Minister Boris Johnson to stop the fast-spreading new coronavirus-variant triggered selling in the British pound and helped the EUR/GBP to trade strongly near day’s highs around the 0.9135-40 region.
The pair opened the new week with a bullish gap and traded firmly up during the Asian session. The deadlock in the post-Brexit trade-deal talks over the issue of access to the UK’s fishing waters also helped GBP bulls.
The European Parliament’s deadline to receive the text of any deal for its ratification, before the end of the transition period, is on Sunday.
The developments surrounding the pandemic and Brexit overshadowed the positive news on the much-awaited US fiscal bill. Also, the FDA approved Moderna’s coronavirus vaccine for emergency use. The US dollar was back in demand, exerted some pressure on the EUR/USD, and could cap the gains in the EUR/GBP.
The pair has regained some 150 pips from last week swing low around 0.8980. As the economic dockets are scarce in both the EU and UK, Brexit as well as pandemic headlines could drive the EUR/GBP action in the day ahead.
At the time of writing, one Euro buys 0.9194 British Pounds, up 1.58% as of 10:24 AM UTC.
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