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Coronavirus and Brexit dominate headlines

05 Feb 2020

The coronavirus continued to leave an impact on the markets. The EUR/USD is being pressured and trades at 1.1050. The pair seems to be unable to gain following its corrective bounce. 

On Tuesday, the two currencies extended the previous session's rejection slide after follow-through selling, from the 1.1100 area. The buying interest in the U.S. dollar helped the pair but was offset by the decline. U.S. economic data resulted to be better than expected. 

This week, the ISM Manufacturing PMI was released, highlighting a return to expansion territory. Results boosted the dollar. 

An improvement in the global risk sentiment supported the pair to see an intraday upsurge for U.S. Treasury bond yields.

Disappointing Eurozone PPI print held the EUR/USD from gaining. 

Furthermore, fears over a no-trade deal Brexit continued to hold the Cable from improving. The GBP/USD trades around the 1.30 handle.

British PM Boris Johnson claimed that the UK will not hesitate to stop negotiating with the EU if the bloc fails to propose better deals. 

He said, “there is no need for a free trade agreement to involve accepting EU rules on competition policies, subsidies, social protection, the environment or anything similar, any more than the EU should be obliged to accept UK rules.”

The EU’s chief Brexit negotiator Michel Barnier is hoping to reach a deal with zero tariffs and quotas on all goods.