Pound On The Defensive Following Brexit Talk Disappointment

A lack of progress on a UK-EU post-Brexit trade deal left the Pound on the back foot on Friday. This defensive approach from the Pound was confirmed over the weekend as Boris Johnson stated that there were still differences in agreement which means that talks are still ongoing. This saw the currency finish the day of trading at 1.1079 against the Euro and 1.318 against the US Dollar. This week, all eyes will be on the latest GDP estimate where the pound could be boosted if there is a rebound in growth.

As the US Dollar weakened and news that factory production in Germany had expanded, the Euro trended higher on Friday. This was welcomed by Euro investors who will be looking ahead at the latest ZEW surveys this week. It’s likely that the Euro is going to face some headwinds as economic sentiment is likely to be impacted by new lockdown measures across the Eurozone.

As the election result had not been announced the US Dollar was very much on the defensive, seeing some losses although some of these were regained later in the day. This was down to news that domestic unemployment had dropped from 7.9% to 6.9% in October. Now, with the election results revealed, the US Dollar could see interest from investors.

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