Sterling higher as Brexit meal looms
Wednesday 9 December, 2020
Daily Currency UpdateGBP - British poundUK Prime minister Boris Johnson is set to have dinner with European Commission president Ursula von der Leyen later today, to try and find solutions to the remaining issues holding up a post-Brexit trade agreement. The UK government have helped the tone for the talks this evening by dropping its clauses within the UK internal market bill, a sign that compromises can be made by Johnson to get the deal over the line. Ahead of the talks we have seen conflicting comments from both the UK and Europe as to whether a deal can be agreed, which has only added to Sterling volatility.Sterling has ranged between 1.3290 - 1.3430 against the US dollar in the past 24 hours and the range against the EUR has been 1.0970 - 1.1070. The Pound is on the rise this morning also after Michael Gove stated tonight’s crunch dinner will inject some much-needed political momentum to Brexit talks. The top end of these rages will be tested early today, but all will depend on news from Brussels this evening as to whether the pound remains strong into tomorrow.
Key Moversisk appetite has entered back into the market as progress is seen on the US stimulus package and as vaccine news continues its positive path. Growing confidence surrounding US fiscal stimulus was seen overnight as treasury secretary proposed a package of relief measures with a value of $916 billion more than the $908 billion expected. This increases pressure on senate leader Mitch McConneell to drop his opposition.A food and drug administration advised yesterday that there were no new safety or efficacy concerns over the Pfizer COVID-19 vaccine, implying it will be approved for use in America when the administration meet on Thursday. The UK has already started vaccinating with this drug.The USD has weakened across the board as investors seek riskier assets on improved risk appetite. The US dollar, alongside other safe havens, CHF, JPY and Gold, have fallen on the renewed optimism that we are guiding our way out of the pandemic. GBPUSD is back above 1.3400, AUDUSD has broken 0.7450 and EURUSD touched 1.2140 earlier this morning.
- GBP/USD: 1.3300 - 1.3510 ▲
- GBP/EUR: 1.0950 - 1.1120 ▲
- EUR/USD: 1.2090 - 1.2170 ▲
- GBP/AUD: 1.7920 - 1.8080 ▲