The pound fell yesterday after Chief Negotiator, Michel Barnier, addressed EU envoys and stated that differences still persist on 3 main issues and that a deal hangs in the balance. Sterling immediately sold off on these headlines as traders and dealers alike reduced their exposure.
GBPUSD lost just over 1% to trade into the $1.32 handle. Likewise, GBPEUR saw sharp declines, hitting €1.10 at session lows, to see a small bounce as US participants arrived at their desks.
The next few days will certainly be exciting for observers as the likelihood of further market-moving headlines is high. The deeper we push into December with no breakthrough, the more powerful such headlines will be in respect to FX impact.
Today sees global November services PMIs. The eurozone will kick off proceedings between 8 am – 9 am. The UK number is scheduled for release at 9.30 am. The afternoon session will see US initial jobless claims, services PMI, and ISM non-manufacturing data.
8:17am, December 3rd 2020
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