Daily Currency Update

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Cummings exit lifts the Pound

GBP - British Pound

The pound was given a lift on Friday afternoon as news broke that Dominic Cummings, Chief Adviser to Boris Johnson, had left downing street with immediate effect. Both Dominic and Lee Cain, Director of Communications, who was released on Thursday, are supposedly working the rest of their contracts from home, however it is likely this is gardening leave. It has been reported that Cummings had an extremely confrontational working style, which grated a number of Tory MPs.

Cummings was a key architect in the Brexit saga; however, reports suggest his absence will not slow down the negotiations. Some analysts predict a deal may be reached in the next 10 days, whilst others suggest the UK may seek further extension, due to COVID and the desire to not disrupt vaccine distribution. There has been further vaccine news, as Oxford University/Astra Zeneca, have announced they have a solution rivalling Pfizer’s. More news expected on this throughout the week.

In other news, PM Johnson is self-isolating after one of his team confirmed they were COVID positive on Sunday. Despite this, Johnson claims he feels “as fit as a butcher’s dog”.

Key Movers

Further confirmation that President Elect Joe Biden won the election was granted last week, as results came in for the state of Georgia. Biden won the majority, taking his electoral college votes to 306, out of a required 270. Chinese delegates, among others have congratulated Biden on the win, and while not directly announcing defeat, Trump has suggested he may not be in office, come January 20th. Biden likely to announce Janet Yellin as his Treasury Secretary.

European Central Bank President, Christine Lagarde spoke on the likely recovery of the Eurozone as “unsteady” and “stop and start”, following the distribution of the vaccine. With greater clarity in global markets, it is likely the ECB will announce further easing measures on December 10th, with either a further package, quantitative easing, or least likely, a rate cut.
This week we see an abundance of US and Eurozone data, most notably US Core Retail sales on Tuesday at 1:30 and Lagarde to speak on Friday at 8:15am.

Expected Ranges

GBP/USD: 1.3145-1.3310 ▲

GBP/EUR: 1.1075-1.1240 ▲

GBP/AUD: 1.7990-1.8155 ▲

GBP/CAD: 1.7190-1.7375 ▲