GBP

Sterling has gained around half a cent against a broadly weaker dollar in early trading, the pound’s rally has come after renewed Brexit optimism. According to several news outlets, the European union will propose to remove up to 50% of customs checks on British goods at the Northern Ireland border. Maroš Šefčovič, European Commission Vice President, said that they will be offering “very far-reaching” changes to resolve the issue surrounding the movement of UK goods, including medicine. However, the EU’s proposals made no mention of the EU courts oversight of the protocol which could still be a sticking point. Last night, Government sources did acknowledge that the EU had “clearly” gone further than the UK had expected. The two sides are now expected to enter intensive talks as early as next week. Against the Euro, the pound has remained largely unchanged.

EUR

The euro staged an impressive comeback yesterday after hitting near 15-month lows against the dollar on Tuesday. However, the recovery was fuelled by broad selling around the greenback rather than renewed euro strength. The divergence of Central Bank policies may keep any further gains for the single currency in check for now.

USD
The dollar touched its lowest point this week against major peers on Thursday, taking a breather from its recent rally that had been powered by stimulus tapering and possible Federal Reserve interest rate hike expectations. Although the release last night of the Federal Reserve Bank‘s minutes from their September meeting confirmed tapering of their pandemic bond buying scheme is all but certain this year, the greenback failed to take advantage as markets had already priced this into the dollar’s recent rally and resorted to “sell the fact“ trading.

Economic Calendar

01.30 pm US Producer price index
01.30 pm US initial jobless claims