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Sterling rose in value for a 4th consecutive day of trading as the Bank of England (BoE) suggested there would not be a move to intoduce negative interest rates.
By Chris Doane
The pound to euro exchange rate rose 0.7 percent yesterday afternoon, consolidating comfortably above the 1.10 level.
This was meant to be the week in which the UK and EU finally agree a trade deal, but it is almost certain this deadline will now pass.
The pound surged more than 1 percent against the euro and 1.5 percent against the US dollar on news that the UK and EU will restart trade talks.
Last night, PM Boris Johnson announced a series of new restrictions due to the increase in coronavirus cases in the UK, causing GBP value to slide.
Sterling has continued to gain against the euro and US dollar at the start of the week, but Brexit uncertainty could be preventing further gains for the pound.
Investment banks Morgan Stanley and Golman Sachs have both confirmed a reduced negative outlook for the pound as optimism for a Brexit deal grows.
The pound bounced to make more than 0.5 percent against the euro and close to 1 percent against the US dollar during yesterday’s trading.
The pound has continued its gains this week due to a positive end to Brexit talks last week, reducing the risk of a no-deal Brexit.
After comments from the Bank of England on future montary policy, sterling saw a 'sell-off' falling against the euro and US dollar.
Prime minister Boris Johnson returned to office yesterday, apologising for his absence and thanking the country for respecting the social distancing measures.
As the UK enters its 3rd week of lockdown, economic data starts to show the strain on the ecocomy due to the coronavirus.
The US Fed cuts interest rates in light of global economic stress caused by Coronavirus
Traders look to Thursdays Bank of England interest rate decision as rate cut odds remain at 57% according to CME's BOEWatch Tool.
Weak UK and Eurozone Manufacturing PMI data points to continuing contraction in the sector.