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Jun 25 - 11:55 AM

GBP/USD - COMMENT-Brexit Quandary Helps Keep Mixed Sterling On Defense

By Paul Spirgel  —  Jun 25 - 11:10 AM

Sterling eased versus the dollar in early U.S. trade as a paltry fall in U.S. jobless claims stoked existing coronavirus global economic worries nL1N2E20HC, while heightened Brext-talk tensions could relegate it to sell-on-rallies status at best.

Though the pound demonstrated relative strength versus the yen and euro, this was the byproduct of safe-haven flows returning to the dollar rather than a vote of confidence in the UK currency, which encountered new worries over final-status talks with the EU that could weigh further on GBP/USD.

After EU negotiator Michel Barnier highlighted the dim outlook for a breakthrough in Brexit talks on Wednesday, comments on Thursday from his British counterpart, David Frost, injected no new optimism nS8N2DF09J.
That left the sterling-negative prospect of Britain and the EU concluding their transition period at year-end without a deal lingering in investors' minds.

Absent a negotiations breakthrough, or reduced COVID-19 anxiety, GBP/USD could remain a sale ahead of 100-and 10-day moving average resistance in the high 1.2480s as sterling weakness is likely to outpace other majors.

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Source:
Refinitiv IFR Research/Market Commentary

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