- British Leader Arriving for Last Ditch EU Talks
- America Closing in on Stimulus Deal
- USD Weakness Pushes Euro Higher
Any hopes of saving a post-Brexit trade deal appear to be on the line today as Boris Johnson heads to Brussels to meet with the President of the European Commission over dinner later today. He brings with him a lot of hope from the GBP forex market which would surely struggle if no deal is reached. For the moment is stays well-supported as does the Euro on the back of a weakened Dollar with traders hopeful an American stimulus deal can be agreed.
British PM Set for EU Dinner Showdown
UK Prime Minister Boris Johnson jets off for Brussels later today and a dinner with European Commission President Ursula von der Leyen that could determine the fate of any post-Brexit trade agreement and with it the hopes of many forex trading the Pound. It is accepted as unlikely that a deal will be agreed outright today but the meeting is seen as a last chance to work toward an agreement with multiple rounds of negotiations ending in deadlock.
Sterling has remained strong of late and is helped by a weak US Dollar and also the fact that the UK this week did make some concessions in dropping their proposed Internal Markets Bill which was very controversial with the EU since it would have altered terms of their Brexit deal.
US Continues to Edge Closer to Fiscal Stimulus
Both sides of the aisle in the US continued to move closer to another economic stimulus package in the wake of the COVID-19 pandemic. This deal seeming ever closer with Senate Majority leader Mitch McConnell striking a softer tone and making some concessions that could pave the way for a deal to be reached.
Hopes for the more than $900 billion deal have been met by cautious optimism with US markets continuing to move higher in early trading Wednesday. Forex brokers have also noted that this optimism has worked to keep traders away from backing into the safe-haven Dollar once again. Democratic House Speaker Nancy Pelosi has also commented that the latest developments are progressing in the journey to getting the plan passed through congress.
Euro Strong Ahead of ECB Meeting
The Euro also continued to hold firm well above the $1.21 mark approaching a key European Central Bank meeting on Thursday. This is the time at which the ECB said they would “recalibrate” their monetary instruments during their October meeting. This is something all eyes will be on toward the end of the week.
Markets are confident though that there will be no wholesale changes as the outlook appears to be improving with a vaccine roll-out getting ever closer. Add to that the fact that they plan to invest as much as €500 billion extra into their emergency asset purchase program and the possibility of further economic stimulus then it is clear why traders are standing by eagerly.