The Pound remains supported with the UK Parliament approving the post-Brexit trade deal with the EU just in time before the transition period deadline. However, any major gains have been limited as the market remains cautious due to the lack of inclusion of the services industry in the agreement which accounts for 80% of the UK economy. In addition, there are concerns about the number of coronavirus cases in the UK which could prompt the government to introduce tougher restrictions.

Germany is reportedly set to extend its national lockdown until the end of January with other European countries potentially following suit. This has kept the Euro from making any significant gains for the time being as concerns mount over the economic impacts that an extended lockdown could have on Europe’s largest economy. The Euro has lost ground against the Pound but remains strong against a weaker Dollar.

The Dollar remains weak due to a lack of demand for its safe-haven status with the market taking a more risk-on approach into 2021. UK regulators approving the use of the AstraZeneca-Oxford coronavirus vaccine as well as better than expected US unemployment claims data released late last week have been contributing factors.