GBP/USD: Brexit breakthrough and US demonstrations over George Floyd death to boost the pound
|GBP/USD has been advancing to the highest levels in a month amid hopes for a Brexit deal while US protests against racism are grabbing the headlines. This could affect the dollar in several ways, Yohay Elam, an analyst at FXStreet, reports.
Key quotes
“According to The Times, Britain is ready to compromise on both fisheries – a small yet politically significant industry – and broader trade relations. The report suggests London is ready to compromise if Brussels does as well.”
“The UK reported only 111 deaths on Sunday, the lowest number in months. This would enable a quicker return to normal, boosting the economy.”
“Demonstrations over the murder of George Floyd continue raging across America, with some including violence and looting. [...] The protests have prompted Republicans and Democrats to accelerate talks on additional fiscal stimulus, encouraging markets. On the other hand, COVID-19 is far from being under control in the US, and massive demonstrations may trigger more infections, eventually halting the reopening.”
“Several data points such as UK mortgage approvals and US vehicle sales are scheduled, yet more significant releases await markets on Wednesday – ADP's jobs report and ISM Non-Manufacturing Purchasing Managers' Index.”
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