- UK and EU struggle to find a solution on N. Ireland Protocol.
- GBP loses strength against its rivals in the second half of the day.
- Broad-based USD weakness limits GBP/USD’s downside for the time being.
The GBP/USD pair came under renewed bearish pressure during the American trading hours on Wednesday with the latest Brexit headlines weighing on the British pound. As of writing, the pair was losing 0.16% on a daily basis at 1.4133.
Lack of progress in N. Ireland Protocol talks hurts GBP
Earlier in the day, the British government reiterated that they will consider all options available for safeguarding peace, prosperity and stability in Northern Ireland if they fail to find a solution with the European Union. On the same note, David Frost, the British minister responsible for implementing the Brexit deal, said there were no breakthroughs and no breakdowns in N. Ireland Protocol talks with the EU.
Commenting on the same matter, Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight, noted that they at a crossroads in their relationship with the UK.
Reflecting the negative impact of these comments on the GBP, the EUR/GBP pair is rising 0.4% on the day at 0.8628.
On the other hand, the sharp decline witnessed in the US Treasury bond yields continue to damage the USD on Wednesday and limit the GBP/USD’s downside for the time being. At the moment, the US Dollar Index is down 0.2% at 89.96.
There won’t be any high-tier macroeconomic data releases from the US in the remainder of the day and Brexit headlines are likely to continue to impact GBP/USD’s movements.
Technical levels to watch for