On Friday, the Pound lost some strength after Prime Minister Johnson said that the UK needs to prepare for a no-deal Brexit after a lack of progress on the Brexit front. Nonetheless, the market has seen some renewed optimism that a deal can be done after Foreign Secretary Raab said a deal is still possible which has wiped out any Sterling losses. . Bank of England Governor Bailey has said that it is better to act aggressively when combatting the effects of the virus and with lockdown restrictions as he mentioned that it is expected that economic activity at the end of Q3 2020 will be 10% less than the previous year.
Italy has announced further measures after 11,705 new coronavirus cases were announced on Sunday in an effort to avoid a full national lockdown. This news has kept the Euro from making any gains for the time being. ECB President Lagarde has mentioned that the central bank has the tools to adapt further if the Eurozone economy suffers further from the second wave of the coronavirus.
Renewed hopes of a larger US fiscal stimulus package being introduced has kept the Dollar weak with a lack of demand for its safe-haven status. To add to this, China has recorded economic growth of 4.9% in Q3 2020 with the recovery from the coronavirus starting to build momentum which analysts see as a positive for the global economy. Several FOMC members will be making speeches today with their comments likely to cause some short-term volatility.