GBP/USD under pressure below 1.2600 amid risk-off mood

• GBP/USD consolidates the downside amid risk-aversion.
• Coronavirus fears offset UK fiscal stimulus optimism.
• UK turns down EU coronavirus vaccine scheme.

Following a steady decline in the overnight trade, GBP/USD looks to extend the downside consolidative mode below 1.2600 in early Europe and remains vulnerable amid broad risk-aversion.

The persistent surge in coronavirus cases in the US, concerns over the global economic rebound and Brexit uncertainty exert bearish pressure on the spot.

Further, the Telegraph report that Alok Sharma, the UK Business Secretary walked away from the European Union’s (EU) coronavirus vaccine scheme, adds to the downside in the pound.  

The UK turned down the offer after failing to secure "sufficient assurance" that the Kingdom would receive the number of vaccines it needs on time.

The cable reverses the recent surge led by the UK fiscal stimulus announcement. “On Wednesday, Chancellor of the Exchequer Rishi Sunak laid out a detailed program including a job retention scheme and other means of boosting the economy,” as noted by FXStreet’s Chief Analyst, Valeria Bednarik.  

In the day ahead, the risk-off market mood could likely continue to benefit the safe-haven US dollar and keep the major undermined. Traders will also watch out fresh Brexit headlines and US PPI data for fresh trading impetus.

GBP/USD technical levels