GBP

The rally seen for Sterling on Wednesday proved to be short lived. Brexit minister Lord Frost told peers the European Union was failing to take seriously that it was making laws “for another territory” following Brexit. The Cabinet Office said Brussels sprung an update that more than 600 new measures impacting upon Northern Ireland had now been adopted by the bloc in the past three months, with a further 200 in the pipeline. The UK also recorded the highest number of Covid infections seen since January. As a result, Sterling sellers returned having today traded either side of EUR 1.1700 and 1.3850 in Asia. This morning’s release of June jobless claims confirmed an increase to 114.8k (prior 92.6k).

USD
Testifying to a Congressional Committee, Federal Reserve Chairman Jerome Powell repeatedly said that the central bank expects inflation to ease later this year. This ‘dovish’ tone was enough to attract broad based US Dollar sellers (with exception to Sterling). Latest US jobless claims, Philadelphia and NY State manufacturing indexes are released at 1.30pm.

EUR
The Euro eventually rallied across the board during yesterday’s session following Jerome Powell’s comments, having earlier failed to break the three-month low zone of 1.1780 (opening at 1.1840 today). Short term resistance is seen at $1.1850, a break here may attract technical buying in the Euro’s favour again.