The Pound has been given a boost after Chancellor Sunak announced a stimulus package worth £30 billion which focuses on employment and both the hospitality and property sectors. Sunak also mentioned that the exact state of the economy won’t be known for a while. There is also some optimism over post-Brexit trade negotiations as EU chief negotiator Barnier has reportedly said he is ready to grant the City of London access to the EU markets. This is despite German Chancellor Merkel suggesting that progress with the UK has been limited and that the EU should prepare for a possible no-deal scenario.
The Euro has lost ground against the Pound but made some slight gains against a weaker Dollar. ECB member de Guindos believes that the market can be more positive about the Eurozone’s recovery from the pandemic as recent data has generally beaten expectations. Analysts have suggested that if EU member states can agree to the proposed EU recovery fund or at least come to a compromise, then the Euro would be given a boost.
Despite fears of a second wave of coronavirus cases, the market has become optimistic about a quick economic recovery which has weakened the Dollar in the last 24 hours. To support this, FOMC member Bullard has said that he is optimistic about the US economic outlook despite virus cases increasing across the country. US unemployment claims are due at 1:30pm which will be closely watched by the market and may provide some short-term volatility.