Brexit Trade Deal Likely Which Causes GBP/USD Rate To Cruise Past Key Level

Through trading on Wednesday, Brexit optimism drove the Pound forward as the currency benefited from hopes that a deal is almost within reach. This caused the GBP to US Dollar rate to finish the day at 1.314 while the GBP to EUR rate also reached a six week high of 1.1079 according to the Foreign Exchange Market. Despite this good fortune for the currency, the current state of affairs in the UK and it’s handling of the new tiered systems and funding could have a significant impact on the way in which the Pound performs.

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The Euro also moved higher yesterday as it took advantage of a weak US Dollar due to a negative correlation between the two. However, the single currency has dropped significantly against the pound while the current coronavirus situation is leading to further restrictions being implemented, which is likely to have a negative impact on the recovery there.

Current hope surrounding further US stimulus meant that the safe-haven currency became less-favourable during trading yesterday. This caused the Pound to surge against the US Dollar causing the USD/EUR rate to fall to a new six-week low. Looking forward, the latest jobless claims reports could put a dent in any resurgence that the US Dollar was hoping for.

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