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Brexit talks boost Sterling to a weekly high

29 Sep 2020

With Brexit talks resumed, the Sterling hit a one-week high on Tuesday, as the EU seems to be willing to work on a joint legal text of trade agreement. 

The Pound Sterling was being traded 0.3% higher at 1.2866, whereas the euro and the yen, were weaker against the dollar. “Clearly if there is enough progress by Friday, that will be bullish for the pound,” strategist Kenneth Broux pointed out.

Discussions between the EU and the UK will last until Friday morning, according to The Times. MUFG analysts said, “This week is a very, very important week for the pound as we slowly grind toward the day of true Brexit.”

“In negotiations and given the political capital that (Prime Minister Boris) Johnson is losing in the fight against COVID we see the balance as having shifted more in favour of a deal.”

Ahead of the first debate between the U.S. presidential candidates, the U.S. dollar slipped from its two-month highs. President Donald Trump and Democratic challenger Joe Biden will participate in a debate that will boost the dollar, “although the non-negligible risk of a contested outcome (along with the ultra-dovish Fed) may keep the dollar’s upside somewhat capped in the run-in to the vote”. This was noted by ING strategists.

This morning, the greenback was valued at 94.033, down by 0.1%.