Reports have emerged that EU leaders are pushing for no-deal Brexit plans to be published by the European Commission. This in turn weakened the Pound against the Euro and Dollar after it performed well in the first half of yesterday. EU negotiators will update EU leaders on the state of the negotiations at 7am on Friday which will be closely watched by the market.
The Euro remains on the back-foot as analysts believe that there is a chance of another economic contraction due to increasing coronavirus cases across Europe. Reuters has reported that there is a possibility that EU leaders could push through their recovery fund without Poland and Hungary’s approval. This would decrease pressure on the ECB to provide more monetary stimulus and could lead to the Euro strengthening.
The Dollar continued to weaken yesterday as optimism over coronavirus vaccines was still prevalent in the market which dented the greenback’s safe-haven status. In the latter half of the day, this was reversed as concerns about the economic impacts amongst US states from the pandemic took focus.