The pound is continuing to strengthen versus the dollar and the euro during early Wednesday trading. Sterling’s gains, at a time of make-or-break for the negotiations between the EU and the UK over a future trade deal, mean investors are relatively confident in a positive outcome because despite lingering difficulties in reaching a consensus over matters such as fishing, neither side appears willing to walk away from the negotiating table without a trade deal.
In the last few days we have seen a general decline in volatility, which has also been reflected on gold with the price steady at 1,880, waiting for new market drivers.
We are seeing an interesting challenge between the risk on, which is still dominating markets and is a bearish element for gold, and the overall uncertain scenario, with central banks still forced to print money and the continued presence of Covid-19 ensuring the economic damage will last for a long time.
European stocks drifted slightly lower at the opening bell on Wednesday, following the trend registered in Tokyo overnight, as virus fears continue to mount in many cities. The uncertainty brought by the US election has vanished and investors have switched their focus back to macro data in an attempt to assess the impact of the huge second wave of the virus on many economies. As a result, they are reducing their exposure to riskier assets and diversifying their portfolio with other instruments such as Treasuries and crypto currencies. Traders are still bracing for a volatile day with lots of major macro news on the horizon such as CPI reports from EU and Canada as well as US Building Permits and a speech from ECB chairman Christine Lagarde. The FTSE-MIB of Milan is the eurozone’s only positive performer with the Index trading over 21,500pts.
Pierre Veyret– Technical analyst, ActivTrades
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Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.