UK Preliminary Quarterly GDP is out on Thursday at 09:00 MT time.
UK pound goes up on Brexit agreement
On Monday, the UK pound went up because a Sunday Times report told that the United Kingdom was approaching a deal for breaking up with the European bloc and an all-UK customs pact would be part of it.
With negotiations at an impasse five months before the UK leaves the EU, traders are getting anxious and the UK pound is moving steeply on any news of a probable breakthrough.
For the last 10 months of this year the UK pound has lost nearly 3.6%.
However, on Monday, the UK pound managed to ascend by 0.3% hitting a 10-day maximum against the evergreen buck - $1.3065. Against the common currency, it rallied to 87.33 pence, which is its highest outcome since October 11.
The UK pound was backed by a report over the weekend, which told that an all-UK customs deal is going to be written into the legally binding the pact, which governs the United Kingdom’s withdrawal from the European bloc.
It would suggest an Irish "backstop" deal to dodge a hard border between the Irish republic and the UK province of Northern Ireland, isn’t required, as the Times informed. Eventually, the issue has appeared to be the key obstacle to Brussels and London agreeing a deal.
On Thursday, the previous week the UK currency had its best day of 2018 versus the evergreen buck on Thursday.
It’s believed that an agreement with Brussels on the terms of divorce will remove a big uncertainty overshadowing the British economy and the Bank of England as it attempts to tame inflation.
This week the European bloc and the UK government official have played down expectations for an inevitable Brexit deal, stressing that while a pact is close the two sides still have much to do.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.