EU chief negotiator Barnier said that fisheries, state aid and competition remain the key issues during post-Brexit trade negotiations. However, the UK is reportedly willing to come to a sensible compromise on fishing and both sides have agreed to redouble their efforts to reach an agreement. This led to the Pound strengthening across the board. This morning, UK employment data showed that the unemployment rate increased to 4.8% although both average earnings and the claimant count change impressed the market with better than expected readings.

The Euro has weakened against a stronger Pound but has held up against a volatile Dollar for the most part. Italy reported 25,271 cases yesterday which is an increase compared to the same time last week. Eurozone and German ZEW economic sentiment figures are due to be released at 10am this morning which may cause some short-term volatility.

Yesterday afternoon, the Dollar saw a surge in demand as Treasury bond yields increased which decreased bond prices. This led to an increase in demand for these Dollar-denominated bonds which ultimately led to the Dollar strengthening. However, overnight the Dollar weakened again. This is because Congress is currently split between the Democrats and Republicans which may make it hard for the Biden administration to introduce a fiscal stimulus package soon. This has led to speculation that the Federal Reserve may have to intervene to stimulate the economy using monetary policy. Also, news that a COVID vaccine is within reach helped dent the Dollar’s safe-haven status.