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Brexit deal helps the pound close 2020 on a positive note

- Currencies Direct

Brexit deal helps the pound close 2020 on a positive note

Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks...

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The biggest story over the past couple of weeks was the announcement of a last-minute Brexit deal, which helped to lift the Pound.

During this time, we 've seen GBP/EUR fluctuate between 1.09 and 1.12 whilst EUR/GBP slipped back to 0.90. Meanwhile, GBP/USD climbed from 1.35 to 1.36, at the same time that EUR/USD jumped from $1.21 to $1.23.

What 's been happening?

The pound received a shot in the arm in the final couple weeks of 2020 as an eleventh-hour Brexit trade deal between the UK and EU prompted a notable relief rally in Sterling.

However, a large portion of these gains were erased at the start of 2021 following the news that most parts of the UK would be going back into a strict lockdown.

Meanwhile the US dollar selling bias remained firmly entrenched, with the safe-haven currency crumbling to a new 32-month low amid a prevailing risk-on mood.

At the same time, the euro has largely maintained its bullish run through the end of 2020 and into 2021, with the single currency 's negative correlation with the US dollar offsetting concerns over tougher coronavirus restrictions.

What do you need to look out for?

Looking ahead, any upside in the pound is likely to remain limited through the first half of January as the new lockdown measures will undoubtedly stoke fears of a double-dip recession in the UK.

The euro could also face some hurdles in the coming weeks, amid the spread of a more infectious stain of Covid across the continent and concerns over the slow pace of vaccine rollouts in the EU.

For USD investors the focus looks to be on the incoming Biden administration, with hopes for more stimulus measures likely to help prop up market sentiment and weaken the US dollar.

At Currencies Direct, we're here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers. Since 1996, we've helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.

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