Disappointing labor data from the UK's private sector failed to shift risk sentiment during London trade on Tuesday. The pound sterling was higher against the greenback based on renewed hopes that the Brexit talks will lead to an agreement. Both the prime minister and the finance minister felt that the talks were progressing positively and that a deal could soon be signed. News of a possible vaccine to combat COVID-19 also helped to shift investor sentiment toward higher risk assets, which helped push the GBP/USD to a 2-month peak. According to one strategist, the pair is gaining traction with investors as it could make a significant difference in the economic outlook of those areas hardest hit by the coronavirus pandemic.
In London trading as of 11:19 am, the GBP/USD was trading at $1.3263, up 0.8018% and sliding away from the session peak of $1.32655; the low for the trading day was recorded at $1.31546. The EUR/GBP was trading at 0.8884 pence, down 1.0371%; the pair has ranged from a low of 0.88832 pence to a peak of 0.89895 pence.
ZEW Surveys Disappoint
In Germany, the earlier release of ZEW surveys of business leaders failed to meet analysts' expectations and sent the euro lower as a result. The ZEW survey of the current situation was better than analysts had predicted, but still dismal at a -64.3; analysts had forecast a further decline to -65 in November, from October's -59.5. The ZEW survey of economic sentiment was worse at 39, while analysts had expected a decline in the reading to 41.7 from 56.1. The Eurozone's ZEW survey was significantly worse than anticipated at 32.8, against a forecast of an improvement to 63.7 (from the previous reading of 52.3). All told, that sent the euro lower, with the EUR/USD trading at $1.1790, down 0.1947% and off the session high of $1.18438.