The US dollar fell sharply on Monday as risk-on trade and falling US Treasury yields weighed heavily on the safe-haven currency.
As talks were initially stated to end on Sunday, GBP exchange rates came under significant pressure ahead of the weekend, weighed down by the possibility of a no-deal scenario.
However, talks were ultimately extended once again and EU politicians expressed optimism over progress towards an agreement.
This renewed optimism gave the pound a solid boost against its rivals, even as UK redundancies reached a record high and inflation continued to weaken.
However, the Bank of England’s (BoE) December policy meeting could put some pressure on GBP exchange rates if policymakers maintain a dovish bias.
As long as the BoE expresses anxiety over the outlook of the UK economy, the appeal of the Pound is likely to diminish, reversing some of its recent gains.
If the UK and EU are able to reach an agreement before the end of the Brexit transition period, though, this could keep a floor under GBP exchange rates for the remainder of the year.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)