EUR/GBP unnerved by Bojo's lockdown warnings UK address, Brexit is critical
|- EUR/GBP has been tailing off from the highs of late as the US dollar firms and sinks the single currency.
- UK PM Johnson addressed the nation about current new restrictions and the second wave of COVID-19.
EUR/GBP was unchanged following UK PM Boris Johnson's address to the nation when he warned that a 2nd national lockdown is possible if people fail to follow rules.
At the time of writing, EUR/GBP is trading at 0.9192 between the day's range of 0.9143 and 0.9220.
Prime Minister Boris Johnson has set out a raft of new coronavirus restrictions for England which could last for up to six months.
Boris Johnson recently spoke to the nation and said that there are unquestionably difficult months ahead of where many more families could lose loved ones.
He stressed that too many are breaking rules and he has appealed for 'discipline, resolve and spirit of togetherness'.
The health secretary Matt Hancock, commenting in the address, said the new restrictions “set out our clear plan to protect Britain against coronavirus”:
The PMs address this evening set out our clear plan to protect Britain against #coronavirus
— Matt Hancock (@MattHancock) September 22, 2020
These new measures will help us to suppress the virus, whilst protecting the economy, education & our NHS
Remember: #HandsFaceSpace & get a test if you have #coronavirus symptoms
The PMs address this evening set out our clear plan to protect Britain against #coronavirus
— Matt Hancock (@MattHancock) September 22, 2020
These new measures will help us to suppress the virus, whilst protecting the economy, education & our NHS
Remember: #HandsFaceSpace & get a test if you have #coronavirus symptoms
All eyes on Brexit
Meanwhile, Brexit perhaps matters most to EUR/GBP.
Asit stands, cracks have emerged favoring a USD tactical squeeze which is threatening the euro and further upside in the cross, EUR/USD.
However, while some might regard the bearishness of the pound as somewhat overcooked, positioning is still far from where it was during prior bouts of heavy Brexit uncertainty.
Therefor, further losses for the pound in the current environment cannot be ruled out.
Cable has dropped to test an important levelon the daily charts in the lower bound range of the 1.27 area.
However, there is scope for more volatility given the fluid political environments on both sides of the Atlantic.
An escalation of tensions between the EU and UK governments with respect to the latter’s intention to break its commitment to the Withdrawal Agreement could threaten a move towards last year’s high in the 0.9325 area in the coming weeks,
analysts at Rabobank argued.
Next week will be an important one for GBP crosses.
EU Commission vice-president Maros Sefcovic said he would meet senior British minister Michel Gove — just ahead of an end-of-the-month deadline from Brussels for the UK to abandon the Internal Market Bill.
meanwhile, the EU lawyers are separately drawing up plans to haul Mr Johnson in front of the European Court of Justice unless he amends his Brexit Bill.
EUR/GBP levels
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