- Pound (GBP) is under pressure as no deal Brexit looks more likely
- Boris Johnson to meet with EC President Ursula von der Leyen tonight
- Euro (EUR) remained resilient even as US Dollar rose
- German trade data in focus
The Pound Euro (GBP/EUR) exchange rate is edging a few pips lower on Wednesday, its third straight day of losses. The pair settled -0.1% lower on Tuesday at €1.1031 after picking up from €1.0965, the low of the day. At 05:15 UTC, GBP/EUR trades -0.1% at €1.1028
The Pound slumped again on Tuesday and remains under pressure as talk of a no deal Brexit grows as the deadline draws closer. With just three weeks to go until the end of the transition period Brexit trade talks remain deadlocked.
EU Chief negotiator Michel Barnier warned that he considered a no deal scenario at the end of the year was now more likely than an agreement on trade. UK Prime Minister Boris Johnson also said that the two sides may have to accept no deal. The Irish Prime Minister was equally gloomy.
Boris Johnson will meet with European Commissioner President Ursula von der Leyen in Brussels later today to attempt to move the two sides closer. Optimism surrounding the meeting is offering some support to sterling.
There is no high impacting UK macro data due to be released today. The focus will remain on Brexit headlines which will continue to drive volatility.
The Euro was well supported in the previous session even as the US Dollar inched higher. Euro gains across recent weeks have been mainly owning to the bearish bias on the US Dollar.
Eurozone data was mixed. The third quarter GDP was downwardly revised to 12.5% quarter on quarter. However German ZEW sentiment expectations improved considerably to 55 in December versus 39 in November following vaccine developments.
Looking ahead German trade data will be under the microscope with analysts expecting exports to ease to 1.2% growth month on month in October, down from 2.3%. Imports are expected to rebound to 1% after declining -0.1% in September.