As trading got underway on Monday, the Pound moved higher based on the fact that Brexit talks would continue between the EU and UK negotiators. So, with further trade talks being held in order to break the deadlock, the currency strengthened but this soon came to an end. Downing Street announced that there was no basis on which talks should resume and that saw the pound finish the day at 1.1002 against the Euro and 1.2948 against the US Dollar according to the Foreign Exchange Market.
The Euro gathered momentum on Monday after improvements in market sentiment put pressure on the US Dollar. As a result, this saw the EUR/USD rate increase to its highest point for a week. The construction data in the Eurozone also helped but it was still a negative reading which meant that the current coronavirus situation would cause the economy to struggle further moving forward.
Improved market sentiment caused the US Dollar to fall behind after economic improvements hinged on positive news that a coronavirus vaccine is close caused investors to look elsewhere. It’s likely that market optimism could fade today as a date for a deal on US stimulus still looks uncertain and this could force market sentiment to drop, forcing investors to take cover in the safe-haven currency.