The U.S. dollar on Wednesday resumed its rebound from near three-week lows, rising broadly on hopes of higher government spending by President-elect Joe Biden's incoming administration and an ongoing economic recovery from the coronavirus crisis.
George Vessey UK Currency Strategist for Western Union Business Solutions, commented: “The new COVID-19 variant, discovered in Britain continues to rattle markets, yet early Monday s panic mode seems to have calmed for now. The UK and France are likely to reopen freight movement between them after the Paris decision to close the border caused major disruptions. The UK reportedly makes concessions on fisheries, hopes for a Brexit breakthrough keep the pound afloat.”
“The UK has reportedly made a considerable concession on fisheries, dropping its demand for an EU reduction of catches in UK waters from 60 percent to 35 percent, still apart from the bloc s demand of 25 percent. The differences are minuscule in economic terms but politically sensitive. European fishery lobbyists feared that Chief EU Negotiator Michel Barnier is ceding too much ground.”
What s more, multiple countries have now banned flights from the UK amid fears concerning a new strain of the virus identified, adding to travel chaos.
Boris Johnson will hold an emergency meeting later today after countries made the decision to shut their borders to Britain following the emergence of a super-infectious strain of COVID-19.
The pound is currently trading at 1.10942 against the euro, according to Bloomberg at the time of writing.
George Vessey UK Currency Strategist for Western Union Business Solutions, commented: “This morning market sentiment has soured and safe haven assets rise as a new strain of coronavirus discovered in the UK has triggered flight bans and heightened concerns. Several countries cancelled flights to Britain and the port of Dover has halted traffic to France, which could lead to serious supply-chain issues ahead of Christmas. Prime Minister Boris Johnson convenes the Cobra cabinet today. GBP/USD is down by more than 1 percent, punished also by
| UPDATED: 11:58, Fri, Dec 18, 2020
Link copied Sign up for FREE now and never miss the top Royal stories again.
SUBSCRIBE Invalid email
When you subscribe we will use the information you provide to send you these newsletters.
Sometimes they ll include recommendations for other related newsletters or services we offer.
Our Privacy Notice explains more about how we use your data, and your rights.
You can unsubscribe at any time.
The pound has “firmed” against the euro as all eyes remain on Brexit negotiations and the promise of “definitive news” of a deal or no-deal scenario before the end of the transition period is up. Experts remain hopeful a deal would result in a boost for the pound.
Pound to euro exchange rate: The exchange rate according to Bloomberg (Image: Bloomberg)
“Today, the BoE decision will likely be something of a non-event, with attention remaining on the aforementioned trade talks.”
George Vessey, UK currency strategist at Western Union Business Solutions suggests there could be a deal on the approach.
“Smarkets betting exchange sees an 80 percent chance of a UK-EU trade deal this year, which is being reflected in sterling’s strong rally over the past 24 hours,” he pointed out.
He added: “Despite the rise in COVID-19 infections and tighter restrictions in many areas, global risk appetite is being supported by the rollout of vaccines, optimism about a big US fiscal package and revived hope of a UK-EU trade deal.”