In London trading on Monday, the Pound edged higher against the US Dollar. The GBP/USD pair moved off the 3-week trough hit during the Asian trading session on expectations that improved economic data will be forthcoming and on renewed hopes that a Brexit trade deal is in the works. Both the UK government and the EU transition team leadership have recently expressed that progress has been made on the agreement. One insider said that it appears that there is optimism from both sides now, with a true willingness to compromise on issues of contention. Britain needs to have a deal in place with the EU before December 31, 2020, when the transition period draws to a close.
As of 11:00 am in London, the GBP/USD was trading at $1.2401, a gain of 0.4243%, and sliding away from the earlier peak of $1.24347. The EUR/GBP was trading down at 0.9042 Pence, a loss of 0.0729%; the pair has ranged from a session low of 0.90196 Pence to a peak of 0.90779 Pence. The GBP/JPY was higher at 132.589 Yen, up 0.4713% and off the earlier high of 132.975 Yen.
Coronavirus Restrictions Reviewed
Improved data is also expected to be seen in the near term, given the latest data on the Covid-19 pandemic. The UK government is considering easing some of the social distancing restrictions which it placed on restaurants and pubs. Boris Johnson, the Prime Minister, is expected to announce a new plan later this week that will give those social venues more capacity and, thus, additional revenue. The Bank of England's decision last week also helped to improve sentiment after they dismissed the need for a move toward negative rates; the BoE also slowed the pace of asset purchases in response to their projections of an improved outlook.