Although advancing to its best levels since the end of July against the dollar on Thursday , sterling failed to remain above 1.3100 and has begun the day down 0.5% from yesterday’s highs. Sterling traded in a tight range against the EUR on Thursday and has remained within those ranges in early trading. Speaking in Belfast where he met the new Irish leader Michael Martin, Prime Minister Johnson reiterated his promise that business’s in Northern Ireland would enjoy unfettered access to markets in the UK. The meeting came ahead of the resumption of next weeks Brexit talks between the UK chief negotiator David Frost and his EU counterpart Michel Barnier. Frost ‘Tweeted’ that it was his assessment that an agreement could be reached in September.
Germany has recorded its biggest daily increase in coronavirus cases in more than 3 months as other European countries struggle to curb a surge in infections. France has declared Paris and Marseille and their surrounding arears “high risk “ zones and granted authorities there powers to impose localised curbs to contain the spread of the disease. This came after the UK imposed a 14 day quarantine on all travellers coming from France. This morning market attention will be on the release of Eurozone GDP at 10.00 am.
The dollar was weighed down on Thursday as Congress failed to agree a virus stimulus package. US and Chinese negotiators will meet over the weekend to take stock of the phase one trade deal. It is expected that China will insist that recent sanctions against TikTok and WeChat the social media platforms are discussed. Later today focus will shift to U.S retail sales for July which are projected to rise at a moderate rate.