The Pound has continued to strengthen against the Euro but has struggled against the Dollar even though this week’s UK-EU post-Brexit trade negotiations failed to end with much progress. Today’s meeting between both parties has been cancelled as EU chief negotiator Barnier suggested that there are big differences in what both sides want to achieve. UK services PMI data came out roughly as expected this morning. Consumer confidence figures were released at -27 which is the highest since March 2020 at the beginning of the pandemic which also supported the Pound.

The Eurozone unemployment rate came out better than expected at 7.4% compared to 7.6% that was predicted. Eurozone final services PMI released at 9am this morning also beat expectations. The EU is set to offer a compromise proposal on the proposed recovery fund next week to convince the ‘Frugal Four’ to back it, although the overall figure will remain at €750 billion. The Euro is holding its ground against the Dollar but has lost ground against a stronger Pound as of late.

Yesterday, the Dollar initially weakened as the market chose to focus on optimism about a potential coronavirus vaccine. However, later in the afternoon, the Dollar strengthened due to both the unemployment rate and non-farm payrolls being released better than expected even though US average earnings data and factory orders disappointed the market. Non-farm payrolls were released at 4800K which far exceeded the predicted 3037K figure, whilst the unemployment rate came out at 11.1%. In addition, with the daily coronavirus case count in the US increasing by 55,000 yesterday the market has taken a more risk-averse approach.