The Pound struggled against the Euro yesterday after data released in the morning suggested that the UK was in a technical recession after two consecutive quarters of economic contraction. It has been reported that business leaders and union heads are urging Chancellor Sunak to extend the furlough scheme beyond October to avoid more jobs being lost for the time being. Sunak said that the government is ‘grappling with something that is unprecedented’ in response to yesterday’s poor GDP data.

Eurozone industrial production disappointed the market with a figure of 9.1% compared to the forecasts of 10.1% which initially weakened the Euro yesterday morning. Germany has seen another rise in the number of new coronavirus cases with 1,445 cases recorded today. German health minister Spahn has tried to diffuse the situation by suggesting that he is optimistic that a vaccine will be ready in the next few months. German final consumer price inflation was released as expected at -0.5% this morning. Eventually, the Euro has recovered and eventually made gains against a weaker Pound and Dollar.

US consumer price inflation beat expectations at 0.6% compared to the anticipated release of 0.6%. The Dollar strengthened before investors decided to focus on the deadlock faced over the next US coronavirus stimulus package which led to weakness in the evening. FOMC member Kaplan believes that a hard lockdown is not necessary for the US, indicating that further unemployment benefits will play a vital role. US weekly unemployment claims are due at 1:30pm which is likely to cause some volatility as usual.