The Pound is trying to recover. Overview for 23.12.2020

GBPUSD keeps trying to resume growing after plunging yesterday. 

The British Pound is still having a tough time against the USD. The current quote for the instrument5 is 1.3434.

Yesterday, the British currency got under significant pressure because of the Brexit complications and a new strain of the coronavirus found in the United Kingdom.  

First things first. Yesterday, the European Union rejected London’s final offer in the matter of fishing, which is one of the cornerstones of the Brexit process. It’s quite unclear whether it means that there are no more hopes for a “soft” exiting scenario or the parties still have time and will to make a deal. 

The thing that makes the Pound so vulnerable and that the British currency can’t control is the appearance of new strains of the coronavirus. If the United Kingdom seals off its borders to prevent the new aggressive COVID strain from spreading, its financial system will be severely damaged. 

Pressure on the treasury increases dramatically and the lack of consensus in the government on many important issues only adds fuel to the controversy. As a result, the Pound is entering 2021 “not in fine fashion”.

Prospects for the economic recovery are deteriorated by expectations of introduction of Tier-4 restrictions in some regions of the country, which imply complete isolation. In this case, the Pound just can’t resist such pressure.