The Pound has continued to strengthen against the Euro and Dollar due to renewed optimism regarding Brexit trade negotiations. However, the Bank of England has taken a dovish stance as they consider whether or not to introduce negative interest rates in the UK. In addition, the increase in the number of coronavirus cases has led to Prime Minister Johnson announcing a stricter three-tier system. This morning, the UK unemployment rate increased to 4.5% although the claimant count change has decreased which had a net neutral effect overall.
ECB member De Guindos has said that the central bank is monitoring the effects that a second wave of the coronavirus is having on the Eurozone before deciding the future of the PEPP program and will reassess it in December. Eurozone and German ZEW economic sentiment figures are due to be released at 10am which may cause some short-term volatility for the common currency. Germany has seen an increase of 4,122 new coronavirus cases today, which is keeping the Euro from making any meaningful gains.
President Trump has reportedly tested negative for the coronavirus which has led to the Dollar weakening further as there has been a loss in demand for its safe-haven status. The lack of a fiscal stimulus package in the US is also hurting the greenback as it loses ground against both the Pound and Euro. US consumer price index inflation data due at 1:30pm will be closely watched by the market.