GBP/USD: Three pound downers

GBP/USD has been attempting to recover in response to reports on Brexit progress. Rising UK coronavirus cases and US political uncertainty may also weigh on the pair, Yohay Elam, an analyst at FXStreet, reports.

More – GBP/USD: The outperformer toward the day of true Brexit – MUFG

Key quotes

“‘We only go into the tunnel if there is going to be light at the end of it’ – the words of EU officials pour cold water on hopes for an imminent breakthrough in Brexit talks and may limit any pound gains. The Guardian's Jennifer Rankin's sources serve as a reality check to more hopeful talk earlier in the day. A ‘tunnel’ is EU terminology for intense talks aimed to produce a final agreement.”

“There is a dearth of positive coronavirus developments of late. PM Boris Johnson is considering slapping additional restrictions to curb COVID-19, especially in northern England. The rising number of cases and economic hardship are now joined by political issues. A group of Conservative Party ‘rebels’ led by Steve Baker is trying to limit the government's powers. PM Johnson's struggles with the virus also weigh on sterling.” 

“President Donald Trump and rival Joe Biden are set to clash in the first presidential debate late on Tuesday. The occupant of the White House is considered a better debater, and he would need all his skills to help him narrow the gap in the polls. Uncertainty about the elections – and Trump's hint he may not guarantee a smooth transition – are weighing on markets and supporting the safe-haven dollar.”