The Pound really gathered some pace on Monday after news that Brexit trade negotiations had been extended, giving investors a much-needed boost. There was further support for the currency after the EU’s Chief Negotiator intimated that a path to an agreement was visible even though there was still a lot to agree on. However, the gains could be short-lived if the latest jobs report shows an increase in unemployment during October. However, the Pound rounded off Monday at 1.0972 against the Euro and 1.3329 against the US Dollar.
The Euro also edged higher yesterday as it took advantage of the negative correlation with the US Dollar, helping exchange rates to increase. Despite this, the gains were limited as new lockdown measures in Germany are sure to have an impact on the Eurozone economy over the Christmas period. During trading today, market sentiment is likely to drive the movement of the single currency.
An upbeat tone to risk meant that the US Dollar didn’t get the week off on the right foot after demand for the currency was dented. This was down to Brexit optimism and hope of another US stimulus package as progress is gathering momentum. Despite this, the latest US industrial production figures are likely to weigh heavily on the safe-haven currency.