GBP/USD: UK round of easing restrictions to limit the slump

GBP/USD is on the back foot, down -0.19% on a day to 1.2245 at press time, amid the Brexit impasse and US coronavirus concerns but the easing of restrictions in the UK could limit the slide, FXStreet’s analyst Yohay Elam informs.

Key quotes

“UK PM Boris Johnson's latest round of easing includes the reopening of bars after over three months. Leicester, the midlands city which is experiencing a new COVID-19 outbreak, is excluded. While the news cheers up traders and may also support sterling, many Americans across the pond will have bars and restaurants off-limits this Independence Day weekend. Coronavirus cases in the US are surging, hitting a new daily high of 55,000 on Thursday.” 

“Earlier on Thursday, investors were more enthusiastic, cheered by the Nonfarm Payrolls report. The US gained – or better-said restored – no fewer than 4.8 million jobs, beating economists' estimates for only three million. The Unemployment Rate fell to 11.1%, also exceeding estimates. While the rapid recovery is encouraging, the data is from the first half of June – before the second wave hit hard.” 

“The Brexit impasse could continue impacting the pound. While both the EU and the UK aspire to reach a ‘landing zone’ shortly, they remain divergent on opinions – and postponed a meeting between top negotiators. The EU and the UK disagree over Brussels' demand that London aligns regulations in return for easier market access.”