“Our central scenario is that some kind of Brexit deal or delay will be agreed. With this in mind, we think sterling will rise, however, given recent developments, the risks to our forecasts are to the downside,” said Simona Gambarini at Capital Economics.

Meanwhile, the dollar’s dominance will slowly melt away over the coming year on weakening global demand and a bleak US economic outlook but a second shock from the coronavirus would push it higher.

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9.00am update: FTSE surges on open

The FTSE has surged 52 points this morning, a 0.84% rise on yesterday's close. 

The FTSE 100 index now sits at 6,213.87. 

6.09am update: British mid-caps end higher on hopes of potential COVID-19 vaccine

London’s mid-cap index ended higher on Wednesday on hopes of a potential COVID-19 vaccine, while optimism over fresh stimulus and a pickup in economic activity in the second half of the year persisted.

A COVID-19 vaccine developed by Pfizer Inc (PFE.N) and German biotech firm BioNTech (BNTX.O) showed promise and was found to be well tolerated in early-stage human trials.

“The turning point appeared to be some vaccine news, an element of the pandemic saga that has been missing from the last couple of weeks,” said Connor Campbell, a financial analyst at Spreadex.

The domestically focussed FTSE 250 .FTMC was up 0.4% after closing Tuesday with its best quarter in eight years, partly on the back of historic global monetary and fiscal stimulus. The export-heavy FTSE 100 .FTSE, however, edged 0.1% lower at the end of a choppy session.