Dollar Dropped Against Strengthened Euro After Brexit Deal

On Thursday, December 24, the European currency, trading at 1.21970, rose by 0.10 percent against the US dollar. On the occasion of the festival of Christmas, future trading on the dollar index was not held on Friday. The EUR/USD exchange rate had seen almost zero improvement a day earlier and closed at 1.21831, while the DXY dollar index dipped by 0.1% to 90.25.

The pre-Christmas exchange session on the currency markets turned out to be very calm: no macroeconomic figures were released on Thursday and, despite the fact that a new ‘British’ strain was found in Germany and Switzerland, fears about the coronavirus pandemic dropped marginally. The current mutation of the virus does not change the severity and length of the outbreak, according to several epidemiologists, although it spreads quicker. In the coming weeks, the results of studies on the efficacy of vaccines against a new strain of the virus will be known, and if their effectiveness is confirmed, risk aversion in the currency and stock markets may rise again.

The main incident on Thursday was the completion, after months of talks, of the Brexit trade agreement between the European Union and the United Kingdom. That news was good not only for the economies of the United Kingdom, but also for the EU, since the shock impact of the termination of current trade and other inter-jurisdictional arrangements would be avoided. The new deal allows for the protection of free trade, visa-free travel between the EU and the United Kingdom, balanced consumer access and maritime capital, as well as the prospect of coordinating restrictions, according to EU Chief Negotiator Michel Barnier.

The publication of significant statistics in the United States on Friday was not planned because of the Christmas holiday.

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