RationalFX : Surging global stock markets and rumours that the UK is potentially shifting its position on the matter of fishing rights in ongoing EU-UK trade negotiations, in order to secure a deal, have pushed the Pound higher against both the Euro and Dollar.
Sterling rallied throughout yesterday against the Euro and Dollar but dropped slightly against riskier assets such as Australian and Canadian Dollars in response to news of a successful Covid-19 vaccine being developed. Meanwhile EU-UK trade negotiations are entering their final week before a crucial mid-month summit of EU leaders will begin, where both sides are hopeful a deal can be signed off.
EU and UK negotiators have been locked in talks and those will continue throughout the week in London to try and secure a breakthrough on the issues of future level playing field arrangements for businesses and the future access of EU fishing fleets to UK waters. Comments from the UK’s Environment Secretary George Eustice on Monday hinted the UK may be beginning to shift their stance on fishing rights, a development that supported market expectations for a deal to be reached this November alive.
Risk appetite seems to have rising even before the news as currency markets turned optimistic that a Biden presidency would result in a bigger fiscal stimulus package for the United States and calmer global trade. This sentiment was further boosted yesterday when Pfizer announced that its experimental Covid-19 vaccine was more than 90% effective. The UK already have an agreement to purchase over 30 million of the vaccines over the end of this year and into 2021.
UK unemployment rose to 4.8% data showed this morning, in the three months to September up from the 4.5% reading previous. This negative move was expected and hasn’t had any effect on Sterling’s run of strength.
07:00 – GBP – Unemployment rate (3M September) rose in line with expectations to 4.8%
07:00 – GBP – Claimant Count Change (October) beat expectations to read -29.8k
Source : ETFWorld.co.uk