Daily Currency Update

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Brexit negotiations back in driving seat

GBP - British Pound

The pound traded higher on Monday after news of the Moderna vaccine left risk-off assets rallying globally. The vaccine proved to be 94.5% effective based on trials so far and alongside Pfizer’s vaccine, is likely to accelerate the return to normality further. The UK has purchased 5m doses, which will vaccinate 2.5m people.

This was short lived however as investors began focusing once again on the Brexit negotiations at hand. With Cummings out of the picture, the odds of reaching a deal before the December 31st deadline have vastly improved. Analyst are suggesting that it is very likely a deal is reached before the deadline, contrary to the rhetoric of certain European officials, who have said that we do not have time to get the legislation in place.

Key Movers

Christine Lagarde’s comments on European restrictions knocked the euro yesterday, as she explained that the R rate had not dropped as drastically as expected/is required. She suggested that restrictions were not tight enough on the continent and that tighter restrictions should be imposed. This will obviously damage European output, hence why the DAX (Frankfurt Stock Exchange) was trading lower on Tuesday morning.

The main news from the US remains the Presidential election controversy, which is hurting the US Dollar. President Trump continues to question the integrity of the election, whilst President Elect Biden has suggested a smooth transition between he and Trump is necessary as a way of saving lives, so he can coordinate the distribution of the vaccine to the public.

Expected Ranges

GBP/USD: 1.3130-1.3330 ▲

GBP/EUR: 1.1065-1.1240 ▼

GBP/CAD: 1.7180-1.7395 ▼

GBP/AUD: 1.7940-1.8150 ▼