The focus in Europe lately has been on the Brexit talks between UK Prime Minister Boris Johnson and EU officials. It looks like the negotiations may continue past the October 15th deadline set by the Prime Minister, while no specific breakthrough in the talks has been expected so far and the parties look to be increasingly headed towards a “no deal” breakup of the economic agreement.
Given the situation, this plays a part in creating weakness for the British pound (GBP) and strength for the US Dollar (USD). Specifically, the dollar has experienced some buying pressure as investors eye Joe Biden as the likely victor of the upcoming presidential election and a revived hope of things “returning to normal” in US politics.
The main risks to the current outlook for the GBPUSD pair is an unexpected breakthrough in the Brexit negotiations and possible new developments in the US election race indicating a slipping lead for Joe Biden.
Get more insights from Giles Coghlan, Chief Currency Analyst, HYCM on the Market Mood on Youtube.
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