This morning, preliminary UK GDP data for the last quarter showed a decline of 20.4% in the economy between April and June. This is the worst quarterly decline on record for the UK economy and has pushed the country into a technical recession for the first time since 2009. However, the fine print does show that the economy started to recover in June as restrictions on movement were eased by the government. In addition, both industrial and manufacturing production beat expectations which has softened the blow for the Pound.
Both Eurozone and German ZEW economic sentiment figures were released better than expected yesterday which gave the Euro some support against the Pound and Dollar. Germany has reported another 1,226 virus cases today with the total number of active cases across the country officially surpassing 10,000 for the first time since 22 May. Eurozone industrial production data is due at 10am which is likely to cause some volatility.
A virtual meeting between the US and China is due to take place later this week about the implementation of the phase one trade agreement, with Chinese officials hoping to focus on issues regarding TikTok and WeChat as well as agricultural purchases. The market remains cautious with the Dollar susceptible to further strengthening if tensions continue to escalate. US consumer price inflation figures will be released this afternoon at 1:30pm.