Outlook Worsens as Coronavirus Worries Rise

GBP price, Brexit news and analysis:

  • GBP/USD has dipped below the psychologically important 1.30 level and will likely slip further on renewed worries about the coronavirus.
  • Meanwhile, the UK and the EU continue to take hardline positions ahead of detailed Brexit negotiations, with UK adviser David Frost the latest to wade in.

GBP/USD may ease further

GBP/USD is at risk of easing further near term after dipping below 1.30 as concerns about the coronavirus outbreak rise. Early European trading Tuesday was dominated by virus news as it was revealed that the head of a hospital in Wuhan has died, South Korea warned of an economic emergency and Singapore Airlines cut flights.

Adding to market concerns, HSBC announced a drastic overhaul including 35,000 job cuts and Apple warned its sales will fall short of target because of the virus. Together, these factors sent investors into safe havens such as gold and US Treasuries, while stocks – including the FTSE 100 – the Australian Dollar, oil prices and Sterling all suffered.

GBP/USD Price Chart, Daily Timeframe (November 20, 2019 – February 18, 2020)

Chart by IG (You can click on it for a larger image)

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Meanwhile, the war of words between the UK and the EU ahead of detailed Brexit negotiations continued, with both sides continuing to take hardline positions. David Frost, who is UK Prime Minister Boris Johnson’s adviser on Europe, said in Brussels that the UK will not be threatened into following EU rules and will trade with the EU on basic international terms if necessary.

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Feb 18

( 11:02 GMT )

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— Written by Martin Essex, Analyst and Editor

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