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Brexit discussions put EURUSD on rollercoaster

Tuesday 15 December, 2020

Daily Currency Update

USD - United States DollarThe electoral college formally confirmed Joe Biden to be president. The first vaccinations were delivered in the US. What’s next, a possible Brexit deal?Based on the rollercoaster EURUSD went on last night, the turbulence suggested market participants hope their will (or won’t) be a deal. EURUSD bounced between 1.213 and 1.216 at least three times throughout the night. It traded at 1.215 at the time of writing this morning. GBPUSD did not witness the same volatility. Instead, it remained relatively flat until early this morning when GBPUSD jumped from 1.33 to 1.3405 at the time of writing.

Key Movers

After opening sharply higher yesterday the pound has now pared some of its gains as it awaits developments from Brexit trade talks in Brussels. GBP jumped yesterday as it was confirmed that the UK and EU would "go the extra mile" in a statement from both sides that trade talks would continue despite yet another self-imposed deadline for an agreement not being met. The UK yesterday confirmed that Greater London and surrounding areas including parts of Hertfordshire and Essex would enter tier 3 Coronavirus restrictions. With case numbers rising in the capital the, its expected to do further economic damage to the UK. The hospitality sector with all restaurants and pubs to close their doors, unless they offer a takeaway service. By acting now, it is hoped the government will not have to change its mind over its plan to relax rules over households mixing over the Christmas period.

Expected Ranges

  • EUR/USD: 1.213 - 1.216 ▼
  • GBP/USD: 1.328 - 1.344 ▼
  • AUD/USD: 0.750 - 0.755 ▼
  • USD/CAD: 1.273 - 1.278 ▼