22/10/2020

Sterling rallies to six week highs


GBP

Sterling rallied to a six week highs against the US Dollar on Wednesday as Brexit talks are set to resume this week. EU Chief Negotiator Michel Barnier stated that both sides must be willing to compromise and that a deal was within reach. He went onto say “we will seek the necessary compromises on both sides in order to do our utmost to reach an agreement and we will do so right up until the last day which it’s possible to do so”.

David Frost speaking on Wednesday welcomed the idea of continuing talks with the EU and will meet with EU negotiators this week. This boosted the pound as it gained over 1.7% against the dollar.

USD

The dollar fell against a basket of major currencies on Wednesday as US stimulus remained the focus for markets. US president Donald Trump and House Speaker Nancy Pelosi boosted hopes an agreement on stimulus was close, sparking demand for riskier assets.

A compromise is still needed in regards to a sizeable package of stimulus to help boost the US economy. Federal Reserve Governor Lael Brainard said the biggest risk to her outlook for economic recovery was that fiscal support from the federal government would be withdrawn too soon.

Key announcements

10:25 – USD – BOE Governor Andrew Bailey speaks
1:30 – USD – Unemployment claims – Forecast at 860k from previous 898k


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