Yesterday, the Pound initially weakened against both the Euro and Dollar as reports emerged that the EU does not see the current progress made during Brexit talks as ‘sufficient’ for a potential deal. However, in the latter part of the morning, the Pound saw renewed strength across the board as the UK will supposedly continue negotiating with the EU beyond the 15th October deadline that Prime Minister Johnson imposed. The EU summit today will be watched by the market for any further developments.
France has announced a night-time curfew in several cities across the country to combat the rising coronavirus cases. There are rumours that Germany will impose similar restrictions if the number of cases does not decrease soon. ECB President Lagarde will be speaking later today and is likely to reiterate that the central bank will be accommodating in their monetary policy. The Euro remains stagnant for the time being.
The Dollar has continued to experience weakness due to political uncertainty stemming from next month’s presidential elections as well as a lack of optimism for a US fiscal stimulus package. Whilst US Treasury Secretary Mnuchin carries on negotiating, the Democrats seem unlikely to give in to their demands easily to prevent President Trump from a political win so close to the election. US unemployment claims will be released this afternoon which may cause some volatility for the greenback.