- GBP/JPY extends the previous week’s decline on Monday.
- The sterling remains pressured on Brexit, mixed economic data and general risk-off sentiment.
- Pre-Fed market volatility, coronavirus fears keep the yen demand intact.
GBP/JPY edges lower on Monday in the early European trading hours. The pair opened higher but surrendered all the initial gains as global risk sentiment sours on Chinese regulatory crackdown and the rising coronavirus cases in the Asia-pacific region.
At the time of writing, the GBP/JPY pair is trading at 150.70, down 0.23% for the day.
A combination of factors assisted the current downside movement in the pair. The key factor remained the detrition of risk sentiment owing to the concerns over slowing global growth and tighter regulation of Chinese firms.
The Hang Seng Index slumped almost 4%, near an 11-month low as shares of Evergrande Group skid over 15% to their lowest level in 11 years.
On the pandemic side, Australia’s Victoria state reported its biggest daily rise in new coronavirus infections this year with 567 cases on Sunday.
Furthermore, the British pound struggles with the recent threat from the US House Speaker Nancy Pelosi that there will be no US-UK trade deal unless the British policymakers resolve post-Brexit disagreements with European Union (EU).
It is worth noting that the S&P 500 Futures is trading at 4,432.0 with 0.91% losses.
On the other hand, the Japanese Yen finds some ground amid hopes for new leadership in Japan that would propose a fresh stimulus to support domestic economic recovery.
As for now, the market dynamics continue to influence the pair’s performance.
GBP/JPY levels to watch
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