GBP/USD Improves as Dollar Weakens, Supported by Expectations for Improvement in British Economy

The Pound has posted a slight recovery against the US dollar in the previous session and continues to trade steady into Wednesday as a result of a recent weakness in the greenback over rising fears about the coronavirus’s economic impact. At the time of writing, GBP/USD is trading around 1.299.

While the coronavirus fears are expected to continue dominating the sentiment in global markets, GBP traders can also keep an eye out on the latest developments surrounding negotiations between Britain and the EU towards securing a trade deal before the end of the year. Discussions are scheduled to start next week and both sides have approved their respective mandates for negotiations.

Although EU Commission President Ursula von der Leyen has expressed interest in building a “close, ambitious partnership with the UK”, EU’s chief negotiatior Michael Barnier continues to maintain a hard stance about an inability to finalize a trade deal within a short span of time. Britain has enforced a hard deadline for the end of the transition period on December 31, 2020, to which Barnier remarks, “In a very brief period, you can’t do everything. We will do as much as we can under pressure of time.”

Meanwhile, GBP/USD has also received some support over an improvement in recent economic figures releasing from the UK. The GDP came in better than expected while markets are expecting the budget to unveil more fiscal spending measures that are likely to support the British economy.