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Jun 26 - 11:55 AM

GBP/USD - COMMENT-Sterling Extends Slide As EU-UK Trade Stalemate Adds To Virus Woes

By Paul Spirgel  —  Jun 26 - 10:30 AM

Sterling extended its slide versus the dollar after U.S. personal consumption and expenditure data EM showed an unexpected firming in core inflation nL1N2E21KZ, while a backdrop of rising COVID-19 cases and stalled UK-EU trade talks contributed to the pound's unsettled outlook.

The dollar remained broadly bid on the recent uptick in safe-haven flows generally nL1N2E30FO and has seen particular strength versus the pound.

Fears of a no-deal Brexit when Britain's transition period out of the EU ends on Dec.
31
have exacerbated GBP/USD weakness recently as negotiators blame the other side nS8N2AH07GnS8N2DF09J for intransigence.

Growing second-wave virus concerns bode ill for UK growth, already beset by the confused state of EU-UK trade talks and its potentially chilling effect on investment in Britain nL1N2E00XV.

Falling daily moving averages between 1.2426 and 1.2471 were exerting considerable downside pressure on the pound.
A move below Monday's 1.2337 low would put the daily cloud top at 1.2293 in view and then the May 22 low at 1.2161.

Further trade gloom could open the way for declines to May 18's low of 1.2075.


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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