The dollar traded higher in early European trade Tuesday, with sterling nursing losses as uncertainty over the likelihood of a post-Brexit trade deal grows.
Fresh negotiations between the EU and the U.K. over a potential trade deal are set to start again later Tuesday, but the U.K. lit the touch paper over the weekend by threatening to undermine the exit agreement unless free trade terms are agreed by next month.
EUR/USD recovers losses and jumps back above 1.1800 but any further upside, appears elusive amid dovish European Central Bank expectations and renewed Brexit tensions. GBP/USD is under pressure around 1.3140 ahead of Brexit showdown while USD/JPY holds the higher ground above 106.20 as Japan’s economy shrank an annualised 28.1% in April-June.
Gold was down on Tuesday morning as the U.S. dollar rose, however, its fall was lessened by the continuing COVID-19 uncertainty.
Oil prices also fell on Tuesday amid concerns that a possible rise in COVID-19 cases following the U.S. Labour Day long weekend, which also marks the end of the peak U.S. driving season, could squeeze demand for fuel.
Final European GDP figures and Eurozone’s employment rate are due later in the day, while there is nothing of note from the US calendar.
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Published on 2020-09-08 07:59
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