Pound Falls Against Dollar on Brexit and New UK COVID-19 Rules

The  Sterling pound today fell against the  US dollar as  investors remained wary of  the  current state of  post-Brexit trade talks with the  rising chances of  a  no-deal scenario. The  GBP/USD currency pair’s decline was also fueled by  the  increasing coronavirus cases in  the  UK, which saw the  government impose new restrictions to  curb its spread.
The  GBP/USD currency pair today fell from a  high of  1.2867 in  the  mid-London session to  a  low of  1.2711 in  the  American market and  was trading near these lows at  the  time of  writing.
The  currency pair’s initial decline was driven by  the  rising UK coronavirus infections reported on  Monday. Today’s cases were higher than Monday’s, which led the  British Prime Minister Boris Johnson to  impose new restrictions that may last for  up to  six months. Comments by  Bank of  England Governor Andrew Bailey that he would do everything to  support the  British economy after Brexit triggered a  brief rally by  the  pound. News that the  European Commission was working on  the  assumption that they would not reach a  deal with the  UK by  January 1, 2020, drove the  pair lower.
The  cable later fell in  the  American session as  the  Fed Chair Jerome Powell testified before Congress saying that the  US economy was resilient. The  US Dollar Index‘s rally to  a  high of  94.08 today also drove the  pair lower.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s UK Markit PMIs and  geopolitical events.
The GBP/USD currency pair was trading at 1.2736 as at 18:19 GMT, having fallen from a high of 1.2867. The GBP/JPY currency pair was trading at 133.70, having dropped from a high of 134.36.
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