Currently the Brexit trade negotiations are at a stand-still and the EU’s negotiator Michel Barnier is urging Boris Johnson to step in and make a commitment. However, it seems in the short-term currency markets are still favouring the pound sterling. Conservative Party politician Sir John Redwood said: “Sterling has risen by three percent against the dollar and two percent against the Euro.
“Over the last year of talks going nowhere sterling is now 10 percent higher against the dollar and two percent higher against the euro.”
Mr Redwood said he was confused as to why Remainers were not happy about the fact that the pound is gaining in strength.
The Member of Parliament for Wokingham added: “So why no rush by the pro Remain forces to express pleasure, when they are so ready to rush out misleading releases wrongly blaming Brexit every time sterling dips?”
Sterling is gaining ground against other currencies but there are clouds of uncertainty ahead.
Some traders, however, are buying the currency now but predicting a fall in value in the near future.
The pound could slump if there is an unemployment spike at the end of October when the furlough scheme ends.
Valentin Marinov, head of FX strategy at Credit Agricole, told the Evening Standard said: “The pound strength correlates well with the improvement in risk sentiment overnight.
“This, in turn, seemed to reflect some positive news regarding the US-China trade deal as well as hopes for a Covid-19 vaccine.”
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The dollar has rallied slightly due to the Federal reserve hinting on more stimulus packages to boost the US economy.
Amid this the euro has been subdued due to the effect of coronavirus on the bloc.
Today stocks that were devastated by coronavirus lockdown conditions also rose.
IAG, the owners of British Airways gained 4 percent.
Stocks in aviation industry supplier Rolls-Royce also rose by 2 percent.
