GBP/USD: Coronavirus and Brexit to drive the cable

Fear is gripping markets. Coronavirus headlines continue dominating the news, triggering a flight to safety in markets, while speculation about Brexit has been weighing on the pound, Yohay Elam from FXStreet reports. 

Key quotes

“Traders are flocking to American bonds, pushing the ten-year benchmark Treasury yield to record lows of 1.306. In turn, the US dollar is becoming less attractive.”

“While the number of UK coronavirus cases is limited, a large group of Brits is confined to a hotel in Tenerife in the Canary Islands. If more UK nationals are confirmed to carry the virus, the pound disease may eventually push GBP/USD lower.” 

“Diageo, a British-based beverage maker, has issued a warning related to the illness. Additional announcements by UK firms may also weigh on sterling.”

“Official Brexit talks kick off on Monday. While negotiators may compromise behind closed doors, the recent defiant rhetoric has been pushing the pound lower.”