GBP rose against its major rivals in the European session on Monday, as another encouraging vaccine update bolstered risk appetite, while investors continued monitoring the progress of the UK-EU trade negotiations.

British drug giants AstraZeneca (AZN) announced on Monday that its COVID-19 vaccine, developed in collaboration with the University of Oxford, showed an average efficacy rate of 70% in protecting against the virus. The announcement came after promising vaccine results from Pfizer (PFE)/BioNTech (BNTX) and Moderna (MRNA) earlier this month (their Covid vaccines were nearly 95% effective).

The news added to hopes that the working COVID vaccine could help to bring an end to the coronavirus pandemic that had killed more than 1.3 million people worldwide.

Market participants also continue to monitor Brexit headlines. The trade negotiations between the UK and the EU are to go online today as one member of the EU team contracted Covid-19. The EU's chief negotiator Barnier tweeted in the morning that  "fundamental divergences still remain, but we are continuing to work hard for a deal." Meanwhile, Brussels correspondent for France 24 Dave Keating reported that he was hearing rumours that an emergency "temporary Brexit deal" could be agreed this week "to avoid no-deal happening in midst of COVID-19". He also pointed out that "this will not be a deal". "It's essentially an extension. The problem doesn't go away," he added.

Most investors still believe that the two sides will be able to clinch an agreement before the transition period ends on December 31.