GBPUSD is trying to correct on Thursday but the COVID-19 pandemic and Brexit put too much pressure.
The British Pound remains weak against the USD on Thursday despite today’s slight attempts to correct. The current quote for the instrument is 1.2734.
The Pound remains under pressure from two very negative factors, the coronavirus, which is reviving in the United Kingdom and not going to give up, and Brexit, London’s persistent and annoying problem.
The increase in the number of new coronavirus cases in the United Kingdom gives reason to believe that the second wave of the pandemic is already here. If the speed of the disease spread remains the same as today, the government may have to introduce new quarantine restrictions as early as in October. Of course, it’s awful for both the Pound and the British economy.
As for Brexit, it’s getting more and more complicated as time goes by. Talks with the European Union are stuck and, in this light, the British Prime Minister Boris Johnson is very aggressive in lobbying for a bill, which will allow the United Kingdom to unilaterally abandon the performance of some articles of the agreement that was approved in January. As a matter of fact, London is trying to rewind the time but the EU, which is quite sick and tired of all problematic initiatives coming from the UK, is highly unlikely to let it happen. Most likely, The United Kingdom will once again have to ask for an extension of the transition period and that’s a serious stress for the Pound.
Additionally, the USD has been strengthening quickly recently, so market conditions for the British currency may get even more gloomy.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.