Lofty Sterling as Market Still Sees Deal as Likely

GBP was the strongest in G10 Thursday, as the market remains of the view that a post-transition period trade deal could in the offing. Reports continue to suggest some intra-EU divisions, with The Times reporting that Ireland are pressuring France to not sacrifice any workable trade deal on the less important details. In response, GBP/USD rallied to touch 1.35 for the first time since last December's General Election.

Elsewhere, the USD sank further, pressing the USD index to its lowest levels since H1 2018, helping provide a major leg higher for most pairs. JPY traded well despite better equity markets in the US, while oil-tied currencies bounced back from early weakness.

Focus Friday turns to the November nonfarm payrolls release, with the US expected to have added 475,000 jobs over the month and the unemployment rate seen shedding another 0.1 ppts to 6.8%. The street is a little more bullish, with the whisper number at 505,000.