The pound had held on to its recent gains against the euro and remains steady versus the dollar in early trading. Sterling showed little reaction to data released this morning which showed the UK’s economy returning to growth in August after contracting for the first time in six months in July. Yesterday, the International Monetary Fund forecast that the Britain was on track to have the fastest expansion of any country in the G7 group of nations, growing by 6.8% this year.
The BBC is reporting this morning that the EU will today set out new proposals to address recent problems with the Northern Ireland Protocol. Speaking this morning, Conservative Party Co -Chairman welcomed the reports on the steps offered by the bloc and added that “we will engage with them “.
The euro is still failing to make any meaningful gains against its major currency peers undermined by comments from European Central Bank policymakers, who continue with their views that they expect the recent spike in inflation to be temporary. Data yesterday showed that Economic expectations in Germany weakened in October for the fifth consecutive month. The ZEW survey which measures economic sentiment, fell to its lowest level since the March 2020 amid persisting bottlenecks for raw materials. The survey showed that economists expect profits to decrease, especially in vehicle manufacturing, chemicals and pharmaceuticals.
The Democratic-controlled U.S. House of Representatives gave final approval on Tuesday to legislation, temporarily raising the government’s borrowing limit to $28.9 trillion, pushing off the deadline for debt default back until December.
President Joe Biden is expected to sign the measure into law before 18th October, when the Treasury department has estimated it would no longer be able to pay the nations debts without congressional action. The intensity of the Federal Reserve Bank’s debate of when they should reduce their support for the economy should emerge tonight, when the minutes of their last meeting will be released. Prior to this, markets will focus on inflation data when the Consumer Price Index is released this afternoon.
10.00 am EUR Eurozone Industrial Production .
01.30 pm US Consumer Price Index
15.30 pm GBP BOE’s Cunliffe speech
19.00 pm US Federal Reserve Bank’s minutes