Dollar pares some of its losses

Daily Currency Update

GBP - British PoundIts a crucial week for the pound as parliament returns and many schools go back to class after a six-month Coronavirus enforced closure. All eyes will be on how the return for pupils across the country is managed with many parents still concerned about the safety of their children and whether it could lead to a rise in infections. Almost all schools in England and Wales are starting again this week or next with them being prioritised to being kept open should other parts of the economy have to close again. Despite this and the ongoing gap between the UK and the EU over a future trade arrangement, sterling remains well bid with GBP/USD touching 1.34 yesterday. However it has since retraced a touch to currently sit around the 1.3350 handle. As well as ongoing Coronavirus concerns, next week will see the next round of talks between the UK and EU over a future trade arrangement. This could see sterling wobble as we near the end of year deadline for getting a deal done. UK PM Boris Johnson has stated he wants to see the easiest parts of the deal done with the trickier parts being ironed out afterwards rather than proceed with the EU's tactic of getting everything covered off at once. Its likely we will see sterling wobble should next week's headlines highlight no closing of the divide between the two sides.