The news that the UK was ready to abandon Brexit trade negotiations left the pound on the defensive during trading on Wednesday. Talks had stalled and this meant that it was looking likely that ministers were planning on basing any decisions on the fact that a deal will not be agreed. The currency rounded off the day at 1.1007 against the Euro and 1.2735 against the US Dollar. It’s likely that Brexit concerns are going to cause more problems for the pound today.
The Euro reached a new 18-month high on Wednesday according to the foreign exchange market after the agreement on the coronavirus relief fund would lead to a quick recovery. There was also further news on a new fiscal stimulus package and that also bolstered the single currency.
During trading yesterday, the US Dollar fell to its lowest levels since March and this meant that investors decided to avoid the safe-haven currency with fresh hope being placed on the potential coronavirus vaccine. However, the increase in Covid-19 cases had a negative impact on the appeal of the US Dollar. It’s likely that the USD is going to be affected by the US initial jobless claims as it’s likely that they are going to remain high.