Tuesday saw the pound strengthen when it came to trading risks as the exchange rate for the Pound and US Dollar soared up to $1.2731, while it dropped slightly against the Euro to 1.104 according to the Foreign Exchange Market. The rising tensions between China and the UK held the currency back as this could limit any trading opportunities available after Brexit is finalised.
This drop in the Euro was down to profit-taking following the agreement on the EU coronavirus fund. The single currency has been rather relentless in recent weeks due to the hope that a deal would be done and now that it has been agreed, investors began to slacken their positions in the single currency.
Market optimism has been holding back the demand for the US Dollar and so, the currency trended lower on Tuesday. However, the enhanced risk appetite did mean that the Pound US Dollar exchange rates reached a four-month high. However, further coronavirus news is likely to influence markets as the hope for a vaccine is going to have an impact on the global recovery. The US Dollar might be buoyed by the news today that existing home sales are expected to have experienced a rebound in June.