With Brexit negotiations continuing ahead of the EU summit and last week’s high hopes of an EU deal being reached fading, the GBP/USD experienced a fall in value at the start of the week, as it starts lower than the 1.26 mark. 

The sterling saw gains on Friday as there was speculation that talks between the EU and the UK would be successful and lead to an agreement. The Cable added on and reached handles over 1.2700 – which is the highest since the end of June. British Prime Minister Boris Johnson held talks with the Irish Prime Minister Leo Varadkar on Thursday and continued to boost the British pound’s value. European Council President Donald Tusk raised hopes before the weekend talks, saying that he was optimistic about reaching a Brexit deal. However, discussions taking place over the weekend did not show any signs of improvement. 

Johnson’s proposals were discussed by EU Chief negotiator Michel Barnier and the EU27 and pushed the GBP/USD to the 1.2500 psychological mark. 

The EUR/USD saw slight changes as it trades at the 1.1030 region. U.S.-China talks led to an agreement that restricts Washington from imposing new tariffs, that were initially set for Tuesday. The pair saw improvements and rallied to a three-week high at 1.1063 on Friday. It is predicted that the Fed will again cut interest rates at the end of the month.