There was a significant amount of upward movement in the Pound on Tuesday with the Pound to Euro rate reaching €1.12 while the GBP to USD rate soared past $1.32 according to the Foreign Exchange Market. As wage growth figures were better than expected, the currency received a boost despite the bad news of an increase in unemployment. The Pound was also benefiting from the news that a vaccine could be rolled out in December in the UK, signalling that there is some light at the end of the tunnel.
The Euro shrunk on Tuesday after the German ZEW survey was lower than expected, which resulted in economic sentiment slipping to its lowest levels since the start of the pandemic. To add to this, further lockdowns across Europe and a potential double-dip recession weighed heavily on the Euro.
The US Dollar didn’t move a lot during trading with US bond yields pulling back which reduced the demand for the currency. Further disappointing job opening figures also placed pressure on the safe-haven currency. However, looking forward, there seems to be concerns around Trump and his refusal to give up the presidency and that could see investors seek safety in the US Dollar.