The Pound has strengthened as both Prime Minister Johnson and EU Commission President von der Leyen have agreed to extend Brexit negotiations by another month into November whilst both sides are committed to coming up with a deal although Johnson has said that he ‘can live with’ a no-deal scenario. Nonetheless, any significant gains have been limited with Chancellor Sunak expressing how the increase in coronavirus cases will impact the economy.
Eurozone retail sales data is due at 10am which may cause some short-term volatility for the common currency. The Euro has seen some pressure as of late due to poor consumer price index inflation figures which were released on Friday morning. Italy has revised its Q2 GBP figures slightly lower, although this has been largely ignored with the market focusing on the recovery phase in Europe.
Although the US unemployment rate dropped to 7.9% on Friday, both average hourly earnings and non-farm payrolls disappointed the market which led to the Dollar weakening. In addition, US factory orders came out worse than expected at 0.7% compared to 1.5% that had been forecast. President Trump has tested positive for the coronavirus, with speculation about his current condition being the main source of volatility for the greenback.