Home Forex News EURUSD And GBPUSD Retreat From 3-Month Highs Over COVID-19 Fears

EURUSD And GBPUSD Retreat From 3-Month Highs Over COVID-19 Fears

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  • Dollar Strength
  • EU-U.K Brexit Talks
  • U.K Policy Meeting Watch

EURUSD and GBPUSD were flat in Monday European trading session after coming under pressure on Friday on disappointing economic data, and a resurgent dollar. The pairs are showing signs of lethargy at three-month highs as traders scamper for safety in safe-havens on the risk of a new wave of coronavirus infections.

Euro Weakness

The Euro is struggling to hold on to gains after one of the longest rallies against the dollar. The EUR/USD pair has already slid to one-week lows as a string of weak economic data in the Eurozone fails to strengthen traders’ sentiments on the single currency.

The British Pound, on the other hand, faces the biggest test to hold on to three-month gains amidst a string of uncertainties in the U.K/. A plethora of weak economic data continues to fuel a sell-off spree on the Pound.

GBP/USD Talk

The week ahead will be defining test for the Pound as Prime Minister, Boris Johnson is set to hold a high-level meeting with the U.K. The prime minister wants the stalemate sorted out as soon as possible to give certainty to British companies affected by the looming exit.

 

Brexit uncertainty is not the only headwind taking a toll on sterling sentiments in the market. Economic data painting a clear picture of the impact of COVID-19 pandemic on the economy is another Immediate tailwind data indicates that the number of shoppers to malls and shopping parks shrunk by 81.6% in May, a slight improvement from an 84.7% contraction in April.

The Pound has also felt the full force of a resurgent U.S dollar that continues to strengthen across the board as a new wave of coronavirus infections continues to send shockwaves in the U.S and China. Beijing is the latest high profile city to record new cases after weeks of no new infections. It follows on Texas and Arizona in the U.S that have also recorded a spike in new cases.

Looking ahead traders await the U.Ks monetary policy meeting report expected to have an impact on pound strength conversely sway trader’s sentiments on GBP/USD.

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