Pound to Euro Exchange Rate Skyrockets as UK Open to Brexit Deadline Extension: Daily Currency News

GBP Soars as UK Indicates Deadline Flexibility, Pound to Euro Bounces Back 

The Pound to Euro rebounded back to €1.10 yesterday as Boris Johnson indicated a willingness to extend the UK’s self-imposed deadline. This pushed GBP exchange rates almost 1% higher, while the Pound to US Dollar exchange rate also rallied.

GBP exchange rates initially stumbled at the start of the session as reports EU leaders will deem progress in Brexit talks as ‘still not sufficient’ for a deal at today’s EU summit bolstered no-deal Brexit fears.

However, Sterling subsequently soared through the second half of the European session after the UK indicated that today’s deadline to find a deal was not quite as concrete as it had previously suggested.

With this in mind, today’s EU summit may not be quite the risk event it once appeared, although we can still expect it to influence GBP exchange rates depending on whether EU officials are optimistic that a deal can still be found.

 

Eurozone Coronavirus Concerns Mute Euro, EUR/GBP Falls on Brexit Progress

EUR struggled to find direction on Wednesday as surging European coronavirus cases and new restrictions limited the appeal of the single currency.

At the same time, the Euro to Pound exchange rate fell as GBP strengthened on reports of Brexit progress.

Further capping any upside in the Euro was the Eurozone’s latest industrial production figures, which fed into concerns the bloc’s economic recovery is stalling after factory output only narrowly avoided stagnating in August.

Coming up today, the focus for EUR investors will also be on the latest EU summit. Brexit will undoubtedly be a consideration but the spotlight for EUR investors will be EU leader’s discussions on how to better coordinate their coronavirus response.

 

US Dollar (USD) Strengthening Following Dip on Fading Stimulus Hopes

The US Dollar (USD) trended lower through yesterday’s session, undermined by growing doubts that another coronavirus stimulus package will be approved before next month’s election.

Further suppressing demand for the ‘Greenback’ is the heightened political uncertainty in the US, as rising odds for a Biden victory has USD investors concerned about how he could upset the status quo.

Looking ahead, the spotlight for USD investors today will be on latest week’s initial jobless claims. Will another elevated reading raise further concerns over the lack of stimulus and put more pressure on the US Dollar?

So far this morning, however, souring market sentiment on resurgent coronavirus concerns and fading stimulus hopes have boosted US Dollar exchange rates, with USD/GBP and Dollar to Euro recovering some of yesterday’s losses.

 

Canadian Dollar (CAD) Muted on Oscillating Oil Prices

The Canadian Dollar (CAD) continued to trade sideways on Wednesday, with the appeal of the commodity-linked ‘Loonie’ limited as WTI oil prices continued to fluctuate around $40 a barrel.

 

Australian Dollar (AUD) Slumps as Unemployment Rises

The Australian Dollar (AUD) fell back in overnight trade on Wednesday, with the ‘Aussie’ knocked by Australia’s latest jobs report as they showed a rise in domestic unemployment in September.

 

New Zealand Dollar (NZD) Weakens in Risk-Off Trade

The New Zealand Dollar (NZD) also trended lower in overnight trade as a risk-off tone saw investors largely shun the risk-sensitive ‘Kiwi’.

Matthew Andrews

Contact Matthew Andrews


Related