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Forex Market Dips Lower Despite Widespread Optimism

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Forex Market Dips Lower Despite Widespread Optimism
  • GBP Off Highs As Brexit Talks Extend
  • COVID Continues to Trouble Euro
  • Wall Street Set to Continue Positive Momentum

The forex market has been riding high on a wave of recent optimism that has accompanied both the US election results and the latest information on a potential COVID-19 vaccine. Both the Pound and Euro have been trading steadily against the Dollar. The GBP stumbled today on news that yet another Brexit trade deal deadline looks set to be missed. The Euro also faltered slightly on continued virus concerns for the economy. Meanwhile, Wall Street continues to ride the wave with the market pointing toward another higher opening on Wednesday.

Brexit Talks Slip Brings Pound Lower

Sterling has enjoyed a resurgence in the time since the US Presidential election vote was held. The currency has outperformed many others in the market and those forex trading the pair saw it rise to new highs above $1.33 in recent days. It stepped a little lower today though on news that the ongoing Brexit trade deal talks between the UK and EU could potentially miss their latest November 15th deadline.

Talks that to many had looked dead in the water have recently been revived as both sides attempt to come closer to compromise particularly on issues surrounding the proposed Internal Markets Bill in the UK which could also cause problems with the new US President-Elect Joe Biden who is known not to be keen on anything that could alter the UK position on Ireland.

Euro Weighed Down by Virus Numbers

The Euro has not benefited quite as much from the risk-on attitude toward trading this week. Forex brokers noted that EUR/USD trading also remained quiet to start today with the pair slipping slightly lower.

The latest drop in the pair is likely to be due to a growing number of cases and increasing restrictions across the bloc. While there has been some positive news about the Pfizer vaccine, this would still take quite some time to filter through to results on the ground. In the meantime, the Eurozone has continued to struggle with the potential for more stimulus prior to the Christmas period being talked about. ECB President Christine Lagarde is due to speak later today with many standing by to gauge her words before deciding on how to trade.

US Markets Look for Another Strong Opening

A major beneficiary of all this week’s news developments has been the US Stock Market. Wall Street has rallied behind the positive vaccine news since Monday with the Dow Jones in particular showcasing big gains.

A third consecutive strong session looks set to open later as previously beleaguered travel and leisure stocks remain boosted by the hopes of a return to normalcy. Dow Jones and S&P 500 futures were both trading up almost 1% at the time of writing. The tech-heavy NASDAQ continues to dip though many in the index have charted huge gains since the onset of COVID-19.

 

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Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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