Euro Continues to Soar as the British Pound Weakens Amidst Uncertainty

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<a href="https://admiralmarkets.com/analytics/traders-blog/euro-soar-pound-weakens"><img data-resize="auto" data-resize="auto" data-resize="auto" style="width:auto;" data-src="https://fxmedia.s3.amazonaws.com/articles/Euro_Continues_to_Soar_as_the_British_Pound_Weakens.jpg" alt="Euro Continues to Soar as the British Pound Weakens Amidst Uncertainty" rel=""></a>
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Anyone following financial and economic news cannot have failed to notice the resurgence of news about Brexit, as we approach the deadline for negotiations on UK-EU post-departure trade arrangements.
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As one would expect, the effect of this uncertainty has weighed on GBP, which has lost 1% against both the EUR and the USD today – its worst one day performance since September.
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The fall against USD comes despite the dollar's struggles against US trade and fiscal deficits, the expectation of accommodative policies from the Fed and a Biden administration – and now, with a vaccine on the horizon, the USD losing much of safe haven flow it gained during the pandemic.
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Against a basket of currencies, the dollar has fallen by more than 6% this year.
</p><p><em><img data-resize="auto" src="https://fxmedia.s3.amazonaws.com/articles/EURUSD_Daily_Chart.png" alt="EURUSD Daily Chart" rel="" /></em></p><p><em>Depicted: Admiral Markets <a href="https://admiralmarkets.com/trading-platforms/metatrader-5" target="_blank">MetaTrader 5</a> – EURUSD Daily Chart. Date Range: May <em>13,</em> 2020, to December 7, 2020. Date Captured: December 7, 2020. Past performance is not necessarily an indication of future performance.</em></p><p>
Against this background, the <a href="https://admiralmarkets.com/start-trading/contract-specifications/instrument/eurusd" target="_blank">Euro</a> is in a situation where it is rising against its two major rival currencies, a trend the ECB is struggling to contain, as this will hamper European exports. The Euro has gained more than 8% against the USD this year.
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All eyes will be on the ECB's rate setting meeting on Thursday.
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