IFX Market Report: Friday 4th December 2020

The Pound continues to be dictated by Brexit headlines, with GBPUSD rising to fresh 3-month highs on the news that within the last 24 hours the UK and EU negotiation teams are closing in on post-Brexit trade deal. Working into the night both on Wednesday and Thursday, an EU source has claimed that both sides are hoping this leg of talks is the final “big push” to securing a deal.

Thanks to positive news on Brexit and a broad-based selling of the U.S. Dollar cable has been able to test the 1.35 barrier. GBPUSD opened Thursday’s session just above the 1.34 mark at 1.3401 and traded within a slim range until the late afternoon. By which point the pair had spiked and reached as high as 1.3499, closing finally just 1 pip below that 1.3498.

GBPEUR also saw some upside yesterday afternoon with the pair enjoying a brief spell in the 1.11’s. The pair opened at 1.1051 and after gaining some ground late on in the session was able to sustain itself at that level until the close. It is important to note however that this run did not last long beyond the close and the pair found itself back in 1.10 territory and continues to trade there as we go into todays open.

After much excitement at the beginning of this week EURUSD had somewhat of a calm session yesterday. The pair opened at 1.2126 and traded comfortably throughout the day, making subtle gains before the close, finishing the Thursday off at 1.2150.

As Sterling finds some stability after a shaky week, recent gains will most certainly be lost if any news is released that jeopardises a deal. The Telegraph has reported that “Brexit talks are heading for a showdown between Boris Johnson and Emmanuel Macron this weekend with the prospect of an EU deal now dependent on French access to fish in British waters”. President Macron has made is opinions clear regarding fishing – and his determination may induce a no deal if no compromise can be made.

On the data front, a big day for U.S. economic releases. Starting in the afternoon we have the all-important Non-Farm Payrolls for November, forecasted at 6.8% with a previous of 6.9%. Then we have November’s Unemployment Rate, followed by Average Hourly Earnings, Average Weekly Hours, Balance of Trade, Participation Rate, and finally, Factory Orders.

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