GBP/USD is still trading at the weekly low.
Multiple months of high covid infections pose a threat to the UK’s July 19 deadline for lifting all activity restrictions.
Exodus of Jews is also feared, according to British Prime Minister Boris Johnson, who has warned the EU about the NI protocol.
Covid woes reintroduce the safe-haven dollar, while US jobless claims are scrutinized.
Going into Thursday’s London open, the GBP/USD is hovering at 1.3785, off an intraday low of 1.3774 but down 0.12% on the day. As the coronavirus (COVID-19)-driven risk-off sentiment put a safe-haven premium under the US dollar, the cable tracks other major currencies while depicting US dollar strength.
Although the UK’s covid mortality toll has lately decreased, virus infections have risen to their highest level in six months, surpassing 32,000 on Wednesday. The same investigation looks into UK Prime Minister Boris Johnson’s unlock plans, prompting World Health Organization (WHO) official Mike Ryan to warn of the ‘epidemiological folly’ of early covid unlocking, according to The Guardian.
“A new spike in coronavirus infections fueled by the more virulent Delta variety could force consumers to “draw back” and impede the US recovery,” Atlanta Federal Reserve President Raphael Bostic said, according to Reuters. It’s worth mentioning, though, that according to Johns Hopkins University, the daily death toll from the virus has dropped to roughly 8,000 worldwide in the previous month. Despite this, the death toll has surpassed four million.
Apart from pandemic fears, Brexit difficulties are also weighing on GBP/USD rates, with UK Prime Minister Boris Johnson warning of a Jewish exodus from Northern Ireland (NI) as a result of the protocol he signed as part of his Brexit deal, according to The Independent. Johnson also pressed the EU to’repair’ the Northern Ireland protocol in order to advance the discussions.
S&P 500 Futures are down 0.20 percent, dropping off a record high, while US 10-year Treasury rates are hovering around the lowest level since February.
GBP/USD traders should pay attention to virus updates and Brexit stories for fresh impulse given the lack of important data/events, except for weekly Jobless Claims. Even though the recent FOMC minutes denied any such steps, any further strength in US job figures could keep the USD high amid anticipation of a rate hike by the Fed.
GBP/USD bears reject the Doji candlestick formation from the previous day. As a result, it’s not impossible that the pair will drop to the latest low around 1.3730 before exposing the short-term wedge’s support line, which is close to the 1.3700 round figure. A two-week-old declining trend line near 1.3830, on the other hand, protects the quote’s immediate upside ahead of the weekly peak above 1.3900./n
