GBP/USD: EU punish the pound

The cable has dropped below 1.29, hitting the lowest levels since November amid Brexit concerns and USD strength. Speculation about EU-UK relations and coronavirus headlines are set to move the pound, according to FXStreet’s Yohay Elam.

Key quotes

“The bloc could reportedly try to move the clearing of euro contracts from London to within the EU and may also move to withdraw concessions it made to Britain in the MiFID 2 financial regulations.” 

“Official negotiations will kick off on March 3, but press briefings and leaks suggest talks will be tough.”

“The US dollar remains underpinned by upbeat figures such as the Non-Farm Payrolls report which showed an increase of 225,000 jobs in January.”

“Coronavirus headlines are also benefitting the greenback, which benefits from safe-haven flows. The respiratory disease has taken the lives of over 900 people with over 40,000 infected, the vast majority in China.”