GBP/USD registers three-day losing streak with eyes on BOE, Brexit
- GBP/USD extends losses amid fears of China’s coronavirus outbreak, hard Brexit.
- Tories fend off awkward details on Brexit, the EU warns the UK PM to not use the US trade deal for bargaining.
- China expects more than 30,000 people at risk, travel bans are at place despite Lunar New Year.
GBP/USD stays on the back foot while declining to 1.3060 ahead of the London open on Monday. The pair bears the burden of Brexit anxiety and fears of China’s coronavirus outbreak. Investors keep eyes on Thursday’s BOE and Friday’s Brexit alarm for fresh impulse.
With the Brexit date of January 31 coming closer, diplomats at the European Union (EU) and the UK are trying to spread the indirect threats. In doing so, the UK’s Tories tell the BBC to not diverge from current EU trade regulations "for the sake of it" while also fend off the awkward details. Even so, policymakers like British Home Secretary Priti Patel reiterate their plans to overhaul the immigration system to clamp down on low-skilled migration.
On the other hand, the EU has already warned, as per the Independent, the UK PM Boris Johnson that he will fail if he tries to use the leverage of a US trade deal to strike better terms with Brussels.
Elsewhere, fears of China’s coronavirus outbreak have threatened the global risk sentiment by crossing national boundaries and likely infected more than 30,400 people with a span of few days.
As a result, the US 10-year treasury yields drop to multi-week low while surrounding 1.63% whereas most of the Asia-Pacific stocks also portray the risk-off amid holidays in China and Australia.
Looking forward, traders have second-tier US data on the economic calendar ahead of Thursday’s monetary policy meeting by the Bank of England (BOE) that carriers a close call for rate change amid mixed data. Following that the EU-UK will formally be separated at 21:00 GMT on January 31, 2020. Policymakers from both the ends will start talking trade from early February till the year ends.
An ascending trend line since early-November, at 1.3008 now, can offer an intermediate halt to the pair’s declines ahead of 100-day SMA level near 1.2850. Meanwhile, the monthly falling trend line near 1.3160 can challenge buyers during the pullback.