The GBP/USD currency pair is currently in a stronger condition from mid-session European lows. This occurred around an area of 1.3360. However, that thing doesn't have a strong follow-up. Reportedly, their rebound didn't work out so well.
The pair failed to capitalize on a strong rebound the previous day of more than 300 pips. In addition, it also witnessed some selling action during the first half of the action on Tuesday. Other factors such as the Covid-19 pandemic have also had an impact.
The discovery of new variants of the coronavirus and the enforcement of new travel restrictions in the UK continue to make the US Dollar profitable. The currency is considered a safe haven. That thing is one of the big pressures right now.
Pressure Factors in the Market
The above situation is considered as one of the key factors that put pressure on the GBP / USD pair. The British pound is also increasingly pressured by headlines that the E.U. has rejected Britain's latest proposals. The proposal is about fisheries.
It is undeniable that this remains an important point in post-Brexit trade negotiations. However, from the past until now, the problem of fisheries still has not found a solution that is considered favorable to both parties involved.
Meanwhile, British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen reportedly contacted each other by phone call yesterday. They are communicating to find a compromise in the field of fisheries as soon as possible.
However, a fact suggests that there has been no change to the status of quo since last weekend. Thin liquidity conditions before the holiday also kept traders from placing aggressive bets in the market and helped limit the downside.
GDP Release and Other Aspects Still Awaited
The GBP / USD pair managed to withdraw some purchases in a lower level. However, it is difficult in building momentum. Its upper side remains restricted close to the mid-1,3400s, which is now considered a major tipping point.
Going forward, traders will continue to look forward to the release of the final version of the U.S. Q3 GDP report. U.S. economic data also showed information about the release of the Richmond Manufacturing PMI, the Conference Board Consumer Confidence Index, and Existing Home Sales.
Various reports from the past until now are indeed the main parameter. That is why; many market participants are always looking forward to news of the release. That way, market sentiment, and other conditions will be easier to read.
In addition, the existence of a broader market risk sentiment will affect the USD price dynamics in global markets. The price will still go up and down in the future. Such conditions will also create several trading opportunities around the GBP/USD pair.
Corona Virus Mutation Makes the Dollar Stronger
The U.S. dollar reportedly strengthened and improved on Tuesday. This is because of a new type of coronavirus in the UK that causes anxiety. This can be seen through currency markets where volatility is running low. Sterling and the Pound are also still moving.
Sterling fell as much as 2.5% to $1.3190. This situation occurred because countries from Europe to Asia closed travel links with the UK. This is done to try and contain the mutation of the highly contagious coronavirus from the country.
The presence of low liquidity also provides more advantages for the US dollar against other currencies. The pound was helped by a Bloomberg report stating that the EU was considering several options and compromises on fishing rights.
The euro is now in a safe state at $1.2229. Earlier, it briefly fell as much as a cent to $1.2130. The yen was steady at 103.30 per dollar. However, the Australian and New Zealand dollars weakened slightly in a panic due to market conditions.
