Market Sentiment Causes The Dollar To Start The Week On the Defensive

On Monday, the pound fell back slightly as the continued concerns around a no Brexit deal still caused problems for the currency. The current round of talks resulted in a deadlock and still, a trade deal is looking highly unlikely. There was more bad news for the Pound as the continuing unemployment crisis is really holding any gains back. Furthermore, further redundancies are likely next week, leaving the Pound facing potential turbulent times. At the end of trading on Monday, the pound finished the day at 1.1081 against the Pound and 1.3069 against the US Dollar according to the Foreign Exchange Market.

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Negative correlation with the US Dollar saw the Euro move higher on Monday but the coronavirus resurgence across Euro made these gains short-lived. Along with this, there won’t be much in the way of support for the Euro as Germany’s GDP reading indicated that it had experienced a record contraction during the second quarter.

It was a defensive start to the week for the US Dollar as an upbeat market sentiment caused investors to avoid the safe-haven currency. This was bolstered by news that the FDA had approved a coronavirus treatment but looking forward, the US Dollar could struggle to gain any traction.

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