The Pound has strengthened against the Euro and the Dollar after losing ground over the past week. Post-Brexit trade negotiations will resume today with fishing likely to be the main topic of discussion between the two parties. EU fishermen have reportedly demanded that they have the same access to UK waters as part of any deal which is likely to be a stumbling block. The Bank of England’s Chief economist, Haldane, has suggested that the central bank are reviewing negative interest rates as a possible solution if there was further contraction to the UK economy.
EU leaders have agreed to the proposed recovery fund worth €750 billion after a compromise was reached. €360 billion of this package will be made up of repayable loans with the rest as grants to help stimulate economies across the continent. French President Macron said that it was a ‘historic day for Europe’ whilst European Council President Michel believes the deal was a ‘pivotal moment’. However, after making gains against both the Pound and Dollar in the last week the Euro has weakened slightly with the market choosing to ‘buy the rumour [and] sell the fact’.
The Dollar continued to weaken as optimism over a potential coronavirus vaccine undermined the greenback’s safe-haven status. A vaccine being co-developed by Oxford University and AstraZeneca saw positive trials and induces an immune reaction to the coronavirus. Treasury Secretary Mnuchin has indicated that the next fiscal stimulus package in the US will be worth $1 trillion, whilst Democrats are reported to be putting together a counter-proposal worth $3 trillion.