Sterling remains steady after falling to a one month low against the EUR on Wednesday. The Pounds fall came after chief negotiator Michel Barnier told EU diplomats that Brexit talks would be thrust into crisis if UK legislation expected next week, included clauses that would breach the existing withdrawal agreement. Ireland’s foreign minister warned that if the bill deliberately breaches the Brexit divorce accord, it will be taken as a signal that Britain does not want a trade deal. It was also being reported that France would veto a deal if it sees too many compromises from the EU. UK services PMI for November are due for release this morning.
The EUR hit another recent high against the dollar trading above 1.2100 for the first time in 32 months this morning. The EUR was in demand against a broadly weaker USD and got an additional boost from better than expected German retail sales. Eurozone PMI indexes and retail sales are due for release this morning.
The dollar has remained weak and hit an 18 month low against a basket of currencies in early trading. While US legislators have failed to reach an agreement on a coronavirus relief package, there have been signs that a proposal could be gaining traction with the two parties also facing a deadline on 11/12 to pass a $1.4 trillion budget or risk a shutdown of the government.