- Upbeat Brexit headline boosted the pound on Monday.
- A strong rally in equities weighed on the safe-haven USD
The GBP/USD kicked off the week on the front foot, hitting a 4 day high of $1.28 in the European session. Sterling received a boost after both the UK and the EU made concessions to move trade talks forward. The 9th round of trade talks begins on Tuesday and reports suggest that negotiators will begin finalising the deal in the coming days. Should this be the case then a deal will be ready for after the next EU summit in Brussels in mid-October.
A rebound in risk sentiment has resulted in some profit taking for the greenback. Concerns that the economic recovery could stall without an additional fiscal stimulus package have also weighed on the US Dollar, particularly in the absence of any deal being agreed. US political uncertainty with the US elections just weeks away is also undermining the greenback, boosting GBP/USD. Attention will now turn to the first US presidential debate on Tuesday and US economic data later in the week which will drive USD.
Brexit related headlines will drive the sentiment surrounding the pound and could provide some trading opportunities particularly given the lack of high impacting data today.
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