• Pound (GBP) snaps 5 day losing streak
  • Hopes rise that a Brexit deal could be achieved today
  • Euro (EUR) will be driven by sentiment on quiet data day
  • German Gfk consumer confidence hit 6 month low

The Pound Euro (GBP/EUR) exchange rate is pushing higher on Wednesday, snapping a 5 session losing streak. The pair settled -0.15% lower at €1.0982 after picking up from a session low of €1.0927. At 05:15 UTC, GBP/EUR trades +0.3% at €1.1020 at the high of the day.

Brexit optimism is boosting the Pound with a long awaited trade deal possibly on the table today after solid progress in talks over fishing rights was reported. This latest update comes shortly after EU Chief negotiator said that there were still troubles overfishing. This is not the first time that it has been reported that the two sides are close to a deal.

Covid continues to be a strain on the Pound as the number of new daily cases continues to surge to 36,804, a doubling of cases in a month owing to the super-infectious new covid strain. However, France has agreed to reopen the border ending the blockade of lorries.

Data wise the UK GDP was favorable with Q3 GDP final estimate showing that the UK economy grew by a better than forecast 16% quarter on quarter after a -19% contraction in Q2.  Despite the good news, tighter lockdown restrictions are threatening to cause a double dip recession.

The Euro traded higher versus the Pound on Tuesday, however it struggled against other major peers as optimism in the market faded in investors brought into the US Dollar.

On the data front, German Gfk forward looking consumer confidence index slumped to a six-month low of -7.3. Down from -6.8 in December. However, this was also significantly better than the -9.5 expected.

There is no more high impacting Eurozone data due today. Mid-tier data such as Spain’s GDP reading and Italian consumer confidence could attract some attention. However, sentiment is expected to be the main driver of the Euro.