German MEP Reintke has suggested that the UK need to compromise if a Brexit deal is to be reached in time. However, in response senior Conservative members of Parliament have called on the government to reject the idea of compromising. This has led to the Pound weakening against both the Euro and Dollar. UK chief negotiator Frost has travelled with his team to Brussels for ‘intense talks’ with EU leaders so any comments from either party will likely cause some volatility for the Pound. Frost is set to suggest to the EU that a ‘broad outline’ of a post-Brexit trade agreement can be completed over the summer.
ECB President Lagarde suggested that the Eurozone may have already past the worst point of the coronavirus pandemic although analysts think that if there is a second wave of cases on the continent then the Euro could be negatively impacted. German Chancellor Merkel and French President Macron are due to meet today to discuss the European Commission’s proposal of an EU recovery fund which they are in support of and to devise a plan to try to convince the ‘Frugal Four’ of Austria, Denmark, Sweden and the Netherlands to support the proposals as well. Overall the Euro has performed well against the Pound but lost ground against the Dollar.
On Friday, the Dollar strengthened due to its safe-haven as there has been a surge of coronavirus cases in China and in the US with lockdown restrictions being reintroduced in some instances and investors taking a more risk-averse attitude. This morning, the Dollar has lost some ground as a Chinese company developing a coronavirus vaccine posted encouraging results on social media. The market will pay attention to whether the Governor of Texas reintroduces the stay-at-home order after officials from Dallas asked them to consider this in response to the rise in cases in the state.