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Sterling rises over Brexit optimism

30 Nov 2020

On Monday, the sterling saw gains when put against major currencies, including Euro and the Dollar, following Friday’s drop in value. The decline came after several challenged faced by the UK and the EU as the two sides negotiated a future fisheries pact. 
During a Sky News interview on Sunday, UK Foreign Secretary Dominic Raab noted, "On fishing there's a point of principle: as we leave the EU we're going to be an independent ... coastal state and we've got to be able to control our waters.” The UK rejected the EU’s proposal of 15-18% of their fish quota. The lack of progression in talks hindered any increase for the Pound. 
At the start of the week, the British Pound-to-Euro exchange rate was 1.1217, whilst the GBP/USD was at 1.3368. “Sterling remains close to the top end of its recent trading range against the euro and has been firm against the dollar, suggesting that markets remain optimistic about the likelihood of a deal,” economists said. 
Moreover, the Euro-to-U.S. Dollar exchange rate was being traded at 1.1964 – the best rate for Dollar buyers since September 01. Analysts noted, "EUR/USD continues to probe the 78.6% retracement at 1.1926. This and yesterday’s high at 1.1941 we need to clear, preferably on a closing basis, to trigger another leg up to the 1.2014 August peak.” 
Traders are hopeful of a Brexit deal this week, boosting the British Pound, after British Environment Secretary George Eustice said that it was “crucial” for a deal to be reached.