A general deterioration in market risk appetite was not enough to offer the Pound to Australian Dollar (GBP/AUD) exchange rate any boost ahead of the weekend.
Although demand for the Australian Dollar weakened the mood towards the Pound also faltered in the face of renewed market anxiety over UK-EU trade talks.
With investors showing doubts that an eleventh hour deal was still possible GBP exchange rates were left on the back foot during Friday’s trading session.
This overshadowed a better-than-expected CBI industrial trends orders index, even as the uptick from -40 to -25 suggests that the economy began to recover some of its lost ground this month.
Currency Exchange Rate Forecasts 2020-2021: Another Euro-Dollar Correction Is Most Likely To Unfold In Coming Weeks Say Rabobank exchangerates.org.uk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from exchangerates.org.uk Daily Mail and Mail on Sunday newspapers.
Concerns about the possibility of a no-deal Brexit limited the British Pound to Canadian Dollar (GBP/CAD) exchange rate’s rebound last week. Even as the Canadian Dollar was stronger against many rivals though, the Pound did secure some notable recovery against the ‘Loonie’ due to Brexit hopes. Brexit hopes may turn out to be premature if no deal is secured and passed into law in time however.
Despite the Pound’s limited rebound, GBP/CAD still saw notable gains over the past week as it bounced back from its worst levels in months.
GBP/CAD opened last week at the level of 1.6894, after rebounding from the previous Friday’s worst level of 1.6778. This was the worst GBP/CAD level in over half a year, since March.
The Pound to US Dollar (GBP/USD) exchange rate stumbled ahead of the weekend as doubts over the prospect of a UK-EU trade deal picked up once again.
With increasingly little time left before the end of the Brexit transition period markets saw less reason for optimism over the possibility of an eleventh hour deal.
Although the two sides continued discussions this was not enough to keep the Pound from giving back some of its bullish gains made over the course of the week.
As the risk of the UK and EU trading on World Trade Organisation (WTO) terms remains on the table there appeared little room for Pound demand at this stage.
- The Pound to Euro exchange rate crashes lower to test €1.09.
- Brexit standoff.
- New Tier 4 lockdowns cancel Christmas for millions
The GBP/EUR spot rate at time of writing: -0.65% at 1.090277on 22.12.2020.
The GBP/USD spot rate at time of writing: -0.98% at 1.32695 on 21.12.2020.
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