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Coronavirus and Brexit weighing on Pound

13 Jul 2020

Due to renewed concerns related to Brexit, the British Pound paused its run of gains at the end of last week. The EU had stated that negotiations with the UK were still ongoing as a result of “significant differences”. May’s UK GDP print may weigh on the currency if figures will be higher than expected on its release on Tuesday. 

The Pound-to-USD exchange rate increased for a while this morning, jumping higher on risk sentiment as well as UK fiscal stimulus news. However, Brexit news pushed the pair lower again. 

Tomorrow, June’s UK inflation rate results will be published, together with U.S. stats on Wednesday. Currency demand will rise if results show that the coronavirus rebounded price pressures. 

Coronavirus developments will impact the pair’s value, with traders keeping an eye on the U.S. pandemic situation. The greenback will continue to suffer if the number of cases remain high. 

Moreover, the EUR/USD pair was closer to 1.1370 on Monday, with equities nearing 4-week tops. It finds support levels at 1.1310 1.1270 1.1220. The currencies were supported by Germany’s economy ministry, Peter Altmaier stated that the country has passed its low point and is recovering.