GBP/USD: Four reasons to remain bearish

GBP/USD is rising amid prospects of a considerable boost to the economy and amid a tad of dollar weakness. However, there are reasons to doubt this will last, according to FXStreet’s analyst Yohay Elam.

Key quotes

“Fiscal hopes already in the price: Johnson's Conservative Party is not David Cameron's nor Margareth Thatcher's. After years of post-crisis austerity, the Tories shifted toward wooing northern voters and had previously promised to spend. More specifically, Johnson is a fan of pompous infrastructure projects from his days as Mayor of London, so that is no surprise either.”

“Brexit: The fifth round of talks between the EU and the UK kicks off on Monday, and this time they are labeled as ‘intense.’ However, recent comments have not suggested any breakthrough is likely.”

“Coronavirus in the UK: While the COVID-19 curve is falling, Britain's reopening remains slow and the elevated number of deaths in comparison to European peers remains worrying. Moreover, a potential flare-up in Leicester is also worrying.”

“Coronavirus in the US: While markets seem calmer on Monday, America is struggling to contain the illness. Arizona and Georgia reported record infections over the weekend, the positive test rate in Texas remains elevated and California announced new restrictions. New figures from the US may dampen the mood.”