Pound Falls Against Dollar on Brexit and New UK COVID-19 Rules

The Sterling pound today fell against the US dollar as investors remained wary of the current state of post-Brexit trade talks with the rising chances of a no-deal scenario. The GBP/USD currency pair’s decline was also fueled by the increasing coronavirus cases in the UK, which saw the government impose new restrictions to curb its spread.
The GBP/USD currency pair today fell from a high of 1.2867 in the mid-London session to a low of 1.2711 in the American market and was trading near these lows at the time of writing.
The currency pair’s initial decline was driven by the rising UK coronavirus infections reported on Monday. Today’s cases were higher than Monday’s, which led the British Prime Minister Boris Johnson to impose new restrictions that may last for up to six months. Comments by Bank of England Governor Andrew Bailey that he would do everything to support the British economy after Brexit triggered a brief rally by the pound. News that the European Commission was working on the assumption that they would not reach a deal with the UK by January 1, 2020, drove the pair lower.
The cable later fell in the American session as the Fed Chair Jerome Powell testified before Congress saying that the US economy was resilient. The US Dollar Index‘s rally to a high of 94.08 today also drove the pair lower.
The currency pair’s future performance is likely to be affected by tomorrow’s UK Markit PMIs and geopolitical events.
The GBP/USD currency pair was trading at 1.2736 as at 18:19 GMT, having fallen from a high of 1.2867. The GBP/JPY currency pair was trading at 133.70, having dropped from a high of 134.36.
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Original from: www.earnforex.com