The Pound has moved higher this morning after reports suggest that a breakthrough in Brexit talks is closer than last week.
According to The Times newspaper, London are prepared to compromise on some Brexit issues providing that Brussels does as well. The report indicates that Britain might flex on fisheries but also on broader trade relations. Negotiators meet again today in what is the final week of negotiations before they need to make a decision on whether to extend the transition period or not. Boris continues to refuse any extensions and, without reaching a deal before the end of the year, the UK would leave the EU on WTO rules. Traders will be very closely watching how these talks are progressing and the general tone.
Investors are also encouraged by the latest UK coronavirus statistics which showed only 111 deaths on Sunday. Please note that weekend numbers are generally lower but it’s still increasing belief that there could be a quicker return to normal. Monday’s figures will be released later in the day.
In other news, civil unrest continues to rage in the States following the murder of George Floyd from the police. President Trump is threatening to go hard on these protests and bring in the military. The US are still struggling to control Covid-19 and these large protests might create more infections and therefore potentially cause delays to re-opening the US economy. Market risk appetite has so far been fairly resilient to these protests as global economies are reopening and after the announcements of huge support packages from around the world.
As a result, the GBP/USD is 1% higher from yesterday and trading around a 1-month high. The GBP/EUR is also up 1% from yesterday’s low and now trades around a 2-week high.