The Financial Times has reported that the EU has rejected the UK’s initial proposal over access to mainland Europe for British truckers. The British Chamber of Commerce has said that although trading conditions have improved, many companies are struggling with cashflow issues and there is a lack of momentum in the economy. Nonetheless, the market remains optimistic about a UK-EU trade deal being agreed to by September which has kept the Pound buoyant against both the Euro and Dollar. This morning, UK consumer price inflation beat the markets expectations coming out at 1.0% compared to 0.6% that was forecasted.
Another 1,510 coronavirus cases have been reported in Germany today which led to German Chancellor Merkel warning against relaxing lockdown restrictions further. Although the Euro has lost ground against the Pound, it has strengthened against a weaker Dollar. Eurozone final consumer price inflation is due at 10am which may cause some short-term volatility for the Euro.
The Dollar remains weak against both the Pound and the Euro as officials in the US struggle to agree to the next coronavirus fiscal stimulus package. The focus for today will be on the FOMC meeting minutes at 7pm which will give us more insight into how members are viewing the current economic situation in the US and will give the market some idea of the potential policy changes that may take place in September.