According to a recent report on Reuters, trade discussions between the EU and Britain are expected to continue well past the latest deadline of mid-November, with only weeks left to go for the transition period to come to an end. The deadlock still remains to be resolved, but sources from the EU have let on that negotiators could soon come to an agreement on the text of the deal by mid of next week.

The optimism surrounding a possible progress in trade negotiations have helped the GBP surge to an over two-month high against the Euro. At the time of writing, EUR/GBP is trading at around 0.887.

There are also hopes that Democrat Joe Biden’s victory in the US presidential election will provide support to a possible EU-UK trade deal. A conversation between Biden and UK PM Boris Johnson had included discussions on maintaining peace in Northern Ireland as part of the Brexit process.

The GBP has also benefitted from the risk-on sentiment in markets from earlier this week over hopes of a COVID-19 vaccine by Pfizer. Investors are especially hopeful that such a vaccine could help the UK economy recover from its steepest downturn in modern history and offset some of the damage from the second national lockdown announced recently.