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Pound waits on more Brexit news

GBP - British Pound

European Union’s chief Brexit negotiator, Michel Barnier, renewed Brexit negotiations on Wednesday and this caused the pound to jump against a number of currencies. This headline has since faded, and the pound has lost some of the ground it made against the EUR and USD as markets await to hear if a deal is progressing.

Intensive negotiations are due to resume today as Michel Barnier meets with Britain’s Chief negotiator, David Frost, with the hardest issue due to be tackled, fisheries. GBPUSD has dropped from 1.3170 down to 1.3060 and GBPEUR has dipped to 1.1060.

Earlier this morning, data showed UK retail sales saw a record third quarter growth. British sales beat expectations last month and grew for a fifth month in a row, capping a record quarter of growth that took sales volumes to 5.5% above their levels before the pandemic.

UK manufacturing and services PMI is also being released this morning, but sterling movement will be dominated by the latest news on Brexit negotiations. The pound will rise if a deal looks likely and fall if not, so worth keeping an eye out today.

Key Movers

President Donald Trump and Democratic rival Joe Biden entered into their final debate on Thursday with Trump trailing in the opinion polls.

The event was a more civilised event than the last, which saw mute buttons introduced to allow each speaker 2 minutes without interruption on each segment. Early indicators show the debate has done little to change voters’ opinions.

US house of representatives speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid. Welcome news with the second wave of COVID-19 gaining momentum. However, the latest US jobless claims fell more than expected and existing home sales exceeded estimates to more than a 14-year high.

The US dollar had pushed the EUR back under 1.1800 overnight as caution surrounded the debate. Since, the EUR has risen back to around 1.1830. GBPUSD had fallen to 1.3060 but is also climbing this morning.

Expected Ranges

GBP/USD: 1.3050 - 1.3170 ▼

GBP/EUR: 1.1010 - 1.1090 ▼

GBP/AUD: 1.8210 - 1.8440 ▼

GBP/CAD: 1.7120 - 1.7260 ▼