European session review: GBP depreciates, as risk appetite diminishes and concern over no-deal Brexit increases

GBP fell against its major rivals in the European session on Wednesday, as worries over the U.S.-China tensions and coronavirus pandemic dented risk appetite.

The U.S. President Donald Trump warned on Tuesday that the U.S. pandemic will "get worse before it gets better." His uncharacteristically pessimistic words highlighted the U.S. struggle to slow the spread of the virus.

According to the Johns Hopkins Center for Systems Science and Engineering, the total number of confirmed global cases of the COVID-19 rose to 14,974,446, with the U.S. recording 3,902,233 coronavirus cases, the most in the world. 

China’s foreign ministry said the U.S.ordered the closure of its consulate in Houston. He threatened that Beijing would “react with firm countermeasures”, if Washington didn’t “revoke this erroneous decision”. 

In addition, GBP was weighed down by raising concerns that the Brexit transition period would end without a trade deal between the UK and the EU. 

The UK's Transport Secretary Grant Shapps said today that the country wants a free trade deal with the bloc but is prepared for a no-deal scenario. Earlier, the Daily Telegraph suggested the two sides may fail to sign a post-Brexit trade deal.

The UK PM Boris Johnson's spokesman said yesterday that the UK will continue to engage constructively with the EU in talks on a future relationship, but that London is not willing to give up its rights as an independent state.