Blog: GBP/USD stays pressured below 1.42 on delayed reopening, Brexit woes – FXStreet

  • GBP/USD prints losses in the Asian session.
  • Renewed US dollar strength exerts pressure on the pair.
  • Possible delayed lockdown easing, Brexit concerns weigh on sterling.

The GBP/USD pair continues to trade lower in Tuesday’s Asian session. The pair opened almost flat in the early trade and retreated quickly towards the lower side of the trade.

At the time of writing, GBP/USD trades at 1.4160, down 0.13% so far.

The pair came under pressure as the speculation of a delay in the lifting of lockdown restrictions surfaced amid the threat of ‘delta’ COVID-19 strain, first detected in India.

In a recent development, Britain’s roadmap for easing lockdown could be delayed by a fortnight. The Chief medical officer for England, Chris Whitty,  and the Chief scientific adviser Sir Patrick Vallance gave a briefing to cabinet ministers on the latest ‘fairly grim’ data as described.

They emphasized the concerns over the high rate of transmission and vaccination failure to provide 100% protection against the newly found strain. If the decision to fully open the economy is being delayed formally,  then it could be a  negative factor for the sterling for the time being.

In addition to that, UK health secretary Matt Hancock said on the weekend that it was too early to decide whether the easing of restrictions could go ahead as planned. 

Meanwhile, the Brexit woes remain a burden for the cable. As per the latest reports, the EU would consider tough retaliatory measures in the post-Brexit clash with the UK. According to  EU officials, the said course of action would be implied if the UK government fails to implement its post-Brexit negotiations over the Northern Ireland agreement.

On the economic side, Halifax’s House Price Index rose to 9.7% YoY, the most in the last seven years. The reading showed the robust UK housing market. The higher housing market could exert pressure on the central bank to change its current monetary policy stance.

On the other hand, the US Dollar Index (DXY) rebounded from the earlier lower levels to trade at 90.05 with 0.08 gains. The rise in the US dollar keeps GBP/USD gains under check.

GBP/USD levels to watch

 

 

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