GBP/EUR: Pound Steady vs. Euro As Angela Merkel Steps Down
  • Euro (EUR) advances on Brexit optimism & French UK borders reopening
  • US Dollar (USD) slips on mild market optimism
  • US initial jobless claims, durable goods & PCE in focus

The Euro US Dollar (EUR/USD) exchange rate is advancing on Wednesday, snapping a three day losing streak. The pair settled -0.65% lower in the previous session at US$1.2161 just a few pips up from the session low. At 09:15 UTC, EUR/USD trades +0.2% at US$1.2190, after hitting a high of US$1.22.

A mildly upbeat mood is helping the Euro push higher. Hopes surrounding Brexit and the reopening of the French UK border amid the Covid crisis is boosting sentiment.

Today there is very little on the economic calendar. This week data has been broadly better than expected.

Gfk German forward looking consumer confidence revealed that sentiment is set to deteriorate in January as tighter coid lockdowns take their toll. The survey showed that confidence fell -7.3% in January down from -6.8 in December and -0.2 in November. Whilst the reading was better than the -9.5 forecast it was also a 6 month lows.

Looking ahead there are a few mid-tier data points such as Spain’s GDP and Italian consumer confidence. However, price action has been driven by covid this week and this is likely to continue heading into Christmas.

The US Dollar is on the back foot as investors shrug off news that Trump could put a halt to the US covid rescue package. US Congress finally agreed to a $2.3 trillion spending budget including $900 billion covid rescue package. However, Trump considers the $600 direct payment to Americans to be too small.

US GDP data was better than forecast but that did little to boost the mood. US GDP, the third quarter final estimate saw 33.4% growth, versus 33.1% forecast. However, the data also suggests that growth was losing momentum as it approached year end.

Attention now will turn to US data with initial jobless claims, durable goods and PCE figures in focus.