As another week comes to a close, Brexit worries continue to keep the market anxious. EU sources have suggested that face-to-face Brexit talks will resume this weekend after they were suspended when the EU’s chief negotiator Michel Barnier had to self isolate after a colleague tested positive for COVID-19 last week.
Before Thursday’s open cable briefly soared, almost touching the 1.34 mark,but was unable to sustain itself at that level and quickly depreciated opening the session at 1.3360. After a volatile morning GBPUSD dipped significantly in the afternoon but was able to retrace some of its losses and finished the day at 1.3355.
Trading still just above the 1.12 handle, GBPEUR opened that session at 1.1207. The pair traded in a tight range throughout most of the day and finally closed of Thursdays session above where it opened at 1.1215.
After breaking through at 1.19 EURUSD has been able to maintain itself above that mark. The pair opened at 1.1928 and closed at 1.1908. November has been tempestuous period of EURUSD – despite the pair rallying just over 2.9%, the 1.20 barrier remains a key psychological resistance level. The last 2 times the pair has managed to reach that key level was September 2020, and Q1 2018.
The prospects of a smoother transition from the Trump administration to a Biden administration, and an effective COVID-19 vaccine has given the market hope and investors are leaning towards more risker assets. With the market striking a more risk-on tone, the U.S. Dollar index is set to end the week lower and it is likely we could see other currencies gain ground on the greenback.
Moving back to Brexit, it has been reported that “Michel Barnier has called an “urgent” meeting of EU fisheries ministers”. Fishing has proved to be a serious sticking point for both sides and has been described by many as one of the top 3 reasons why a deal has not yet been agreed. When this news was released the Pounds reaction was positive, enabling it to recover the losses it had made earlier in the day. With this in mind, it’s plausible to say that if we hear more ‘positive’ news on this matter, the Pound will strengthen.