GBP/USD fails to break $1.34 amid Brexit jitters

Philip McHugh November 27th 2020 - 2 minute read

The pound ticked lower on Thursday, with Brexit uncertainty again undermining the currency.
Sterling is mostly rangebound so far this morning as these uncertainties remain, with GBP/EUR flat at €1.1208 and GBP/USD stable at $1.3373. GBP/CAD is muted at C$1.7390, while GBP/AUD and GBP/NZD hold steady at AU$1.8118 and NZ$1.9036, respectively.
Looking ahead, the only release of note in today’s data calendar is the Eurozone’s latest economic sentiment, where a souring of sentiment could undermine the euro.

What’s been happening?

The pound was on the back foot again through yesterday’s trading session, as Sterling sentiment was undermined by fresh Brexit uncertainty.
The latest jitters came in the wake of media reports that the EU’s chief Brexit negotiator, Michel Barnier, was considering cancelling his trip to London to continue trade negotiations today, unless the UK government demonstrated that it is willing to make concessions.
The euro, meanwhile, was left flat on Thursday, with the single currency’s initial burst of momentum quickly fading following the announcement that Germany’s lockdown measures would be extended into December.
At the same time, while US markets were closed for Thanksgiving yesterday, this didn’t stop the US dollar from strengthening as fading market optimism bolstered the ‘Greenback’s safe-haven appeal.

What’s coming up?

Turning to today’s session, the data calendar is looking pretty sparse, aside from the EU’s latest economic sentiment index.
This could put some pressure on the euro this morning as economists forecast that the outlook for December will have deteriorated, amidst ongoing concerns that the second wave of coronavirus cases will result in the Eurozone contracting again in the fourth quarter.
In the absence of any GBP data releases, movement in the pound is likely to come courtesy of Brexit headlines today, likely leaving Sterling on the back foot unless there are any breakthroughs.
Finally, with US traders on a half day today and with nothing notable on the data calendar, we may see only limited movement in the US dollar through to the end of this week’s session.

Written by
Philip McHugh

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