- GBP / USD made a nice intraday bounce from levels below 1.2900 amid a weaker USD.
- The prevailing risk aversion and nervousness over the coronavirus helped limit the dollar’s slide.
- Brexit uncertainties and UK lockout fears should limit the rise in the main.
The pair GBP/USD It built on its good intraday positive move and spiked to fresh daily highs, around 1.2985-90 in the last hour, although it quickly pulled back a few pips thereafter.
After an initial drop to levels below 1.2900, the pair witnessed a short hedging move and has now rebounded from the previous day’s negative move to two-week highs. In the absence of negative Brexit headlines, a slightly softer tone around the US dollar was seen as a key factor pushing GBP / USD higher.
The dollar trimmed some of its recent strong gains to four-week highs and was being pressured by uncertainty about the actual outcome of the US presidential election. However, concerns about the potential economic fallout from the new COVID-19 restrictions and weaker sentiment around equity markets helped limit the USD’s slide.
The positive move helped the GBP / USD pair to break two consecutive days of the losing streak, although a combination of factors could contain any uncontrolled rally. Lingering Brexit uncertainties, coupled with fears of tighter lockdown measures to curb the rapid rise in coronavirus cases in the UK, should limit the upside for the pair.
On the economic data front, the mostly upbeat second tier US economic data did little to impress USD bulls or provide a significant boost to the GBP / USD pair. The US economic agenda on Friday also includes the Chicago PMI release and the revised Michigan consumer sentiment, although this is likely to go unnoticed amid the uncertain political situation in the US.
Credits: Forex Street
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