Pressure mounted on the Pound on Wednesday after it became apparent that the new lockdown would only be lifted gradually come March. As a result, the new legislation that was passed by MPs didn’t help the currency although the losses were capped following comments from the Bank of England. The Governor, Andrew Bailey indicated that the economic downturn would not appear to be as bad as was initially forecast. At the end of trading, the currency finished the day at 1.1041 against the Euro and 1.3624 against the US Dollar according to the Foreign Exchange Market.
The Euro showed very little movement on Wednesday following a bounce back in the US Dollar, putting an end to the momentum of the Euro after a negative correlation between the two. Any upside to the Euro was also restricted after the consumer price index in Germany revealed that it was experiencing its fourth month of deflation.
The US Dollar fell back during the session yesterday following the expectations that the Democrats would take control of the US Senate which would lead to more stimulus, causing demand for the Greenback to suffer. Despite this, the US Dollar gained some traction after the latest ADP payroll figures showed a drop in employment growth caused market sentiment to sour.