- Increased chatter about negative rates could cap gains in GBP
- EUR/GBP could remain around the 38.2% Fibonacci
The British Pound is gaining momentum at the end of the week after a new national lockdown dragged on Sterling at the start of the new. GBP/USD traded around1.36 over the past few sessions after failing to breakover 1.37.
Demand for the USD is picking up as markets price in a weak NFP number later boosting safe haven demand. EUR/GBP has failed to stay below 0.90 despite a Brexit deal
Even though the Euro has underperformed the Pound, it has still performed well versus its peers limiting the downside in EUR/GBP.
Increased chatter surrounding negative rates could cap gains in GBP, as concerns grow over the health of the UK economy amid a third lockdown.
As Brexit uncertainty has evaporated , and the new covid strain is no longer just a UK issue, so the Pound could look undervalued despite the risk of negative rates, so a bullish view on GBP remains in the long-run.
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