The Pound continued to strengthen against both the Euro and the Dollar after comments from EU chief negotiator Barnier suggested that both parties will intensify talks to reach an agreement as well as news that the UK is open to compromising on fishing. In addition, the optimism about a potential coronavirus vaccine has pushed back expectations of the Bank of England introducing negative interest rates in the near future. The House of Lords also blocked Prime Minister’s amendment to the Internal Market Bill which acknowledges a break in international law which was also a positive for the Pound.

Both Eurozone and German ZEW economic sentiment figures came out much worse than expected yesterday morning. This put the Euro on the back foot against the Pound from the start of the day. Bank of Spain’s chief economist Arce has suggested that the European Central Bank must act next month in order to avoid deflation. In addition, Germany reported 18,487 new virus cases today which is still on the high-end of where it has been.

The Dollar has continued to weaken as the market is optimistic about the prospects of a coronavirus vaccine as well as less tension surrounding the US presidential election. FOMC member Rosengren has indicated that the Federal Reserve will keep interest rates low for the time being whilst suggesting that fiscal stimulus from the US government is a priority to help households and businesses.