Sterling rebounds due to Brexit optimism
Sterling retracted slightly against the euro yesterday, although losses were limited and Sterling made small gains against the US Dollar as most of the currency market now have a level of expectation that Britain and the European Union will soon conclude a Brexit deal.
British Prime Minister Boris Johnson and President of the EU Commission, Ursula von der Leyen, agreed in a phone call on Saturday to step up Brexit talks to close significant gaps in a new trade partnership. Both sides said they have made some progress but not yet enough to complete a tangible breakthrough. Boris Johnson does not want the Brexit transition to end without a new trade deal in place, but he has belief that Britain could live with such an outcome should that be required.
The safe-haven US Dollar fell yesterday as riskier currencies outperformed. Investors were expecting that US lawmakers will agree on new stimulus to stem the economic impact of the coronavirus, while the currency market also awaits updates on President Donald Trump’s Covid-19 situation.
Stimulus optimism was supported by White House Chief of Staff Mark Meadows, who talked up the potential for a deal among lawmakers in Washington on more economic relief. Failure to reach a deal, however, would strangely likely be positive for the US Dollar due to the overall impact it would have on economic growth worldwide.
- 13.00 ECB president Lagarde speaks
- 14.40 US Federal reserve chair Jerome Powell speaks
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