The pound sterling extended recent gains during London trade on Thursday, gaining nearly 0.6% on the euro on news that market participants in the UK will be permitted to use EU trading platforms for an additional three-month period. Analysts say that will go a long way to avoid chaos in swaps trading. There had initially been some concern that, because the Brexit agreement did not include the financial sector in Britain, there would be a sizable disruption in swaps trading, with some estimates at $200 billion. Even the short-term fix has helped to improve market sentiment, though the absence of a permanent solution means that the subject and concerns will be visited again.
In London trading as of 11:16 am, the EUR/GBP was trading at 0.8992 pence, down 0.432%; the pair has ranged from a low of 0.89751 pence to a high of 0.90411 pence in this session. The GBP/USD was higher at $1.3658, a gain of 0.2982% and off the session peak of $1.36870.
US Labor Data in Focus
As the close of the year draws near, market focus will turn to the last bit of employment data coming from the US. The Labor Department will report today on benefits for unemployment claims through the period ending December 18, 2020 for continuing claims, and December 25, 2020 for new claims. Analysts expect to see a rise in both numbers, to 5,390,000 for continuing claims, and 833,000 for new claims. Looking ahead to next week's non-farm payroll numbers for December, a preliminary survey shows analysts expecting to see a sharp decline in new private sector jobs.