GBP/USD retreats as EU to publish no-deal Brexit plan

The pound fell back on Thursday as fresh Brexit uncertainty undermined Sterling sentiment.
 
Meanwhile, Sterling appears to have stabilised this morning, with GBP/EUR flat at €1.1167 and GBP/USD rangebound at $1.3254. GBP/CAD is muted at C$1.7330, while GBP/AUD and GBP/NZD hold steady at AU$1.8201 and NZ$1.9157, respectively.
 
Looking ahead, with coronavirus cases still surging, will we see investors continue to favour safe-haven assets today?
 

What’s been happening?

The pound drifted lower through yesterday’s European trading session in response to renewed Brexit jitters.
 
These came on the back of reports that EU leaders sought the publication of the European Commission’s plan for a no-deal Brexit, amidst concerns that deadlines keep slipping.
 
This was interpreted as a sign that Brexit trade talks may not be progressing as smoothly as GBP investors had previously hoped.
 
The euro also struggled on Thursday, after European Central Bank (ECB) President Christine Lagarde testified to the European Parliament, warning that the Eurozone economy is under significant pressure from the second wave of coronavirus infections.
 
The US dollar, meanwhile, shot higher yesterday as alarming rises in coronavirus cases in the US and Europe spooked investors and sent them flocking to the safe-haven currency.
 
However, these gains were tempered somewhat by the release of last week’s US jobless claims, where a shock rise in new claims stoked concerns over the health of the US labour market as infections started to accelerate.
 

What’s coming up?

Kicking off today’s session was the publication of the UK’s latest retail sales figures.
 
This has seen the pound get off to a strong start as sales growth proved surprisingly robust in October, with an expansion of 1.2% against forecasts they would stall.
 
Of course, Brexit headlines will also remain in the spotlight for GBP investors today and are likely to continue to infuse volatility into Sterling.
 
On the continent, the focus today will be on the Eurozone’s latest consumer confidence index, where surging coronavirus cases and rising economic uncertainty is likely to have seen consumer morale slump, exerting pressure on the euro.
 
Meanwhile, with alarming coronavirus statistics from the US and Europe likely to continue dominating headlines and unnerving investors, the US dollar will be well positioned to accelerate again through today’s session.