As last week’s session came to a close, the Pound found itself on the defensive following concerns that a no-deal Brexit is still a possibility. According to the Foreign Exchange Market, the Pound to Euro dropped to its lowest point for two weeks with a rate of 1.1123 while the rate against the US Dollar held firm at 1.3307. Brexit is going to dictate the direction of the currency this week and that could mean that it experiences some losses.
The Euro gathered momentum on Friday thanks to the weakening US Dollar and the negative correlation between the two. This meant that the single currency continued to move upwards despite the economic outlook for Europe looking fairly dismal. Germany’s consumer price index will get things moving this week although a month of deflation could push the Euro lower.
Investors moved away from the US Dollar, forcing it to close on a low on Friday. This followed concerns that a third wave of infections could have a significant impact on the US Economy. Improvements in market sentiment also weighed heavily on the US Dollar, especially after further vaccine news improved optimism.