Following the largest decline in 13 days, GBP/JPY seesaws within a 15-pip range.
EU demands assurances from the UK on the Northern Ireland deal, a British ambassador warns the group over the Brexit border issue.
The number of covid cases in the UK has risen to its highest level since late January, yet the Health Minister supports the July 19 unlocking.
Virus updates and Brexit news can keep traders entertained in the midst of a light schedule.
During early Asian session trade on Wednesday, the GBP/JPY was lately sidelined around 152.60-75. The cross-currency pair fell to its lowest level since June 18 the day before, owing to a risk-off mentality and negative stories about Brexit and the coronavirus (COVID-19) situation in the UK. However, the quote’s recent movements are limited due to a lack of big data/events.
If the UK fails to recall the Brexit agreement on Northern Ireland, European Commission Vice President Maros Sefcovic has threatened legal action (NI). According to the Express, the UK’s ambassador to the European Union (EU), Lindsay Croisdale-Appleby, stated that the UK’s post-Brexit border difficulties were considerably bigger and deeper than the bloc’s. “I think the problem is to make sure that the Belfast Good Friday Agreement survives, really, and to make sure that the institutions in Northern Ireland stay strong,” says a British official, according to the news.
In other news, coronavirus (COVID-19) infections in the UK increased to 28,773, the highest level since late January, and Health Minister Sajid Javid expects the numbers to continue to rise. Despite this, the newly hired diplomat supports Prime Minister Boris Johnson’s July 19 deadline for Britain’s unlocking. The UK’s Office for Budget Responsibility (OBR) has identified the COVID-19, mounting debt, and the climate catastrophe as a triple threat to the country. “Britain’s economic recovery from its coronavirus lockdowns has been greater than predicted,” the member of the country’s fiscal watchdog also said, according to Reuters, “but it is too early to determine how much long-term harm has been done by the pandemic.”
Fears of the covid variants Epsilon and Lambda, as well as questions about vaccinations’ ability to control some of the most recent strains, weighed on market mood and bolstered the Japanese yen’s safe-haven demand.
It’s worth remembering that the Asian powerhouse is also dealing with the virus and is preparing for a lengthy lockdown in key prefectures, including Tokyo. Japan is also considering a new budget to combat the pandemic.
In the midst of these maneuvers, US 10-year Treasury yields fell to their lowest level since late February, while Wall Street ended the day neutral. By the time of publication, the S&P 500 Futures had lost 0.10 percent intraday.
GBP/JPY may extend the current downturn due to a lack of important data/events, while keeping a watch on the Brexit and covid stories.
GBP/JPY bears need to break the 100-DMA support of 152.18 to hold the reins despite a strong reversal from the 50-DMA around 153.95./n
