The Pound recovered some of its recent losses after both the UK and EU agreed to intensify post-Brexit trade negotiations. Prime Minister Johnson also eased some of the markets concerns as he said both sides aren’t that far from agreeing to an outline of a deal which could be agreed to by the end of July. He also mentioned that he believes the trade deal will be completed by December just before the end of the transition period.

Although the UK claimant count number exceeded expectations, the overall unemployment rate surprised the market with a reading of 3.9% compared to 4.7% that was forecasted creating a net neutral effect.

Euro (€)

German consumer price inflation released this morning stayed the same at -0.1% which gave the Euro some support against the Dollar. Eurozone and German ZEW economic sentiment figures will be released at 10am which could cause some short-term volatility. The German economy ministry has said that a recovery from the economic damage the pandemic has caused will be gradual during the second half of the year. It also expects Germany’s budget deficit to be at 7.25% of GDP this year after borrowings increased.

Dollar ($)

Yesterday afternoon, the US Empire State manufacturing index came out better than expected but had little effect on the Dollar. Today, industrial production and retail sales data later in the day which will be closely watched by the market. Federal Reserve Chairman Powell will be making a speech at 3pm with the market likely to scrutinize his comments. The Federal Reserve announced that they will start buying investment-grade corporate bonds to continue stimulating the economy by providing liquidity which led to the Dollar weakening as the market shifted its focus away from a possible second wave of coronavirus infections.