Dollar Weakened Against Euro, GBP On Possibility Of Europe Coming To Brexit Deal

Sterling rebounded 0.72 percent to $1.3322 on Monday on the currency markets in anticipation of a last-minute Brexit deal. In spite of another setback this weekend, British Prime Minister Boris Johnson and President of the European Commission Ursula von der Leyen decided to continue negotiations until the last minute in order to attempt to resolve differences.

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The dollar index, which tests its evolution against a basket of six currencies (the euro, the pound sterling, the yen, the Swiss franc, the Canadian dollar and the Swedish krona) has dropped by 0.3% to 90.70 points, in expectation of a new fiscal stimulus package in the US, while the euro has risen by 0.3% to $1.2148, near to its highest level since April 2018. The yield on the 10-year T-Bond remained steady at 0.89 percent in the U.S. government bond market.

Covid situation also impacted the currency markets with the United States remained the most affected country by far, passing the 300,000 death mark on Monday, followed by Brazil with 181,000 fatalities while those were 143,000 in India, 114,000 in Mexico whereas Italy faced 64,500 deaths.

The pandemic has now claimed more than 1.6 million lives in 72.4 million confirmed Covid-19 cases worldwide. In the United States lockdowns are increasing in many states. New York Mayor Bill de Blasio urged people, on Monday to prepare for the idea of a general lockdown and a return to full-time remote working.

In Europe, on Monday, the Netherlands declared a general shutdown cycle of 5 weeks this week. In Germany, Chancellor Angela Merkel declared at the weekend that from Wednesday to at least January 10, non-essential shops and schools will be closed. In France, two massive screening campaigns began in Le Havre and Charleville-Mézières on Monday, on the eve of the partial lockdown scheduled for 15 December.

As of Wednesday, the UK, London and parts of the south-east of England will be under the highest level of warning. Pubs, restaurants, cinemas, theatres and museums will have to close in London once again.