2020.12.0910:59:00UTC+00Pound Spikes Up Before U.K.-EU Meeting

The pound moved up against its key counterparts in the European session on Wednesday, as the U.K. and the European Union had reached agreement on the Northern Ireland protocol and investors awaited today's meeting between PM Boris Johnson and European Commission president Ursula von der Leyen to break the impasse in Brexit talks.

U.K. Brexit supremo Michael Gove told Sky News that there is now a "smoother glidepath" towards a post-Brexit trade deal with the EU.

Gove added that the EU would have to move in order to strike a deal.

Johnson is heading to Brussels this afternoon in a last-ditch attempt to make a breakthrough in trade talks with the EU.

The UK Government dropped controversial plans that breached the Brexit Withdrawal Agreement to help improve relations with the EU and increase the chances of a trade deal.

Hopes of U.S. stimulus measures and encouraging news on COVID-19 vaccines boosted risk sentiment.

Britain started rolling out the COVID-19 vaccine developed by Pfizer and BioNTech, while U.S. regulators took a step closer to approving a COVID-19 vaccine.

The Trump administration on Tuesday proposed a $916 billion stimulus package, but House Speaker Nancy Pelosi rejected it.

The pound rose to a 5-day high of 140.16 against the yen, after falling to 139.03 at 5:15 pm ET. The pound is seen finding resistance around the 142.00 region.

Data from the Cabinet Office showed that Japan core machine orders jumped a seasonally adjusted 17.1 percent on month in October - coming in at 842.5 billion yen.

That blew away expectations for a gain of 2.8 percent following the 4.4 percent drop in September.

Having dropped to 1.3346 at 5:15 pm ET, the pound reversed direction against the dollar and appreciated to a 5-day high of 1.3463. The pound is likely to target resistance around the 1.37 mark.

The U.K. currency advanced to a 5-day high of 0.9006 versus the euro, following a drop to 0.9080 at 2:15 am ET. The next possible resistance for the pound is seen around the 0.88 level.

Data from Destatis showed that Germany's exports grew at a slower pace in October.

Exports increased 0.8 percent month-on-month in October, slower than the 2.3 percent increase seen in September. Shipments were forecast to climb 1.2 percent.

The pound strengthened to a 2-day high of 1.1965 versus the Swiss franc, from a low of 1.1858 seen at 5:15 pm ET. Should the pound rises further, 1.21 is possibly seen as its next resistance level.

Looking ahead, U.S. wholesale inventories for October will be published in the New York session.

At 10:00 am ET, the Bank of Canada announces decision on interest rates. Economists forecast the benchmark rate to remain at 0.25 percent.