Sterling Higher After Shift in Risk Sentiment – 24 November 2020

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Coronavirus vaccines continue to fuel positive risk sentiment, and the GSA announced the beginning of a Biden administration transition.

GBPAn improvement in risk sentiment helped push the pound sterling toward the 2-month peak it had struck on Monday. FX traders are hopeful that the negotiations in Brussels, which are continuing through the week, will end in a deal. Also helping to keep sentiment elevated is news that yet another drug manufacturer has developed an effective vaccine to combat COVID-19. British Prime Minister Boris Johnson said yesterday that it is his hope that nearly all UK citizens would get the AstraZeneca vaccine by Easter. He also announced that a new testing system will be implemented in mid-December, which could possibly shorten tourists’ quarantine restrictions, provided the tests yield negative results.

In London trade as of 11:18 am, the GBP/USD was trading at $1.3352, a gain of 0.241%; the pair has ranged from a high of $1.33812 and a low of $1.33126 in today’s session. The EUR/GBP was higher at 0.8998 pence, up 0.1497%, moving away from the session peak of 0.89101 pence while the low was recorded at 0.88737 pence. The GBP/JPY was trading at 139.277 yen, up 0.0711% and off the session high of 139.555 yen.

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The news that the US General Services Administration’s head has finally acknowledged President-elect Biden helped to shift sentiment toward higher-risk assets, including the Australian and Kiwi dollars. With the acknowledgment from the GSA, the formal transition process can begin, including responding to COVID-19. The AUD/USD was trading higher at $0.7348, a gain of 0.8799%, while the NZD/USD was up at $0.6983, a gain of 0.9337%.

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