GBP

Sterling rose to a one week high on Wednesday as positivity surrounding a Brexit agreement helped the British currency push higher. Reports are suggesting that an agreement between the UK and EU could be reached by early next week with the EU commissioner Valdis Dombrovskis saying that Britain and the bloc were in the last moments to reach a trade deal.

Friction still remains between both sides as compromises still need to be made on a few key issues but reports are suggesting that France are willing to accept its fishing rights in UK waters will be reduced after the transition period ends on December 31st, lowering one of the biggest hurdles in the path of a deal.

Furthermore inflation in the UK was better than expected in October at 1.5% from a previous 1.3%, pushed higher by prices for clothing and footwear and food. Also hopes that a coronavirus vaccine could be available soon has helped the pound push higher in the recent week, with the economic outlook looking a lot brighter if the vaccine proves to be successful.

USD

The dollar fell to a one week low on Wednesday as positive vaccine news was offset by a surge in new Covid cases and tighter restrictions implemented across the United States. Pfizer announced that the final results from the late-stage trial of its COVID-19 vaccine showed it was 95% effective, giving relief optimism to the market. That followed news that Moderna Inc released preliminary data for its vaccine, showing 94.5% effectiveness.

Positive news surrounding a vaccine is giving the global economy optimism for an economic recovery but this depends on when the vaccine will be ready to use.

Key announcements

• 3:00 – USD – Unemployment claims – Forecast at 707k from previous 709k
• 3:00 – EUR – President Lagarde speaks