The pound is strong today following some positive news about the progress of Brexit talks, suggesting that a deal could be reached soon. Negotiations move to Brussels today as the two sides continue to discuss key issues.
Rising coronavirus cases across Europe and the announcement of national lockdowns in Germany and France have caused the euro to weaken and the dollar to strengthen. The European Central Bank are expected to comment on the state of the European economy at their meeting later today.
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GBP: A Brexit breakthrough soon?
The pound is strong against the euro and the dollar this morning due to positive Brexit news, raising hopes that a deal can be made soon. A report yesterday said that the two sides had resolved “some of the biggest disagreements that have long bedevilled the Brexit talks.” Negotiations continue in Brussels today as officials continue to iron out issues.
Although the pound has been driven by Brexit news recently, more reports of a second wave across the UK and Europe could have an impact on the currency in the near future. A major analysis suggests that nearly 100,000 people a day are catching the virus in England.
Later this morning, car production and mortgage figures will be released for the UK.
EUR: ECB meeting today
The euro is weaker this morning on news of more restrictions across Europe, as leaders announced yesterday that both France and Germany will enter national lockdowns. France’s lockdown will begin on Friday until December 2, whilst Germany’s four-week lockdown will begin on November 2.
The European Central Bank will announce their latest decision on interest rates today. Rates are expected to be kept the same. However, it will be interesting to hear what officials have to say about the current pandemic situation and whether this will have any bearing on the introduction of extra stimulus measures.
It’s thought that they are unlikely to introduce new measures today but will potentially pave the way for them to be announced in December.
USD: Dollar strong as infection rates rise
The dollar is strong this morning as rising coronavirus infection rates have sustained demand for safe-haven currencies. It’s a busy afternoon of data for the US today, with GDP figures, jobless claims and home sales data to be released later today.
The US election is now just a few days away. Biden still leads in the polls, but the outcome is far from clear-cut. Uncertainty surrounding the result means that it’s difficult to predict where currencies will move.