Although CBI industrial orders expectation figures came out worse than expected yesterday, UK manufacturing and services data surprised the market with better than expected readings. This helped the Pound gradually recover some of its recent losses against both the Euro and the Dollar

UK retail sales were released this morning at -18.1% compared to -15.8% that was forecasted. This has put the Pound under some slight pressure this morning. British banks have warned the Bank of England against cutting interest rates into the negative territory as it would impact profit and their ability to withstand any loan losses.

Yesterday, Eurozone manufacturing and services data beats forecasts which helped the common currency find some support against a strong Dollar although any major gains have been limited. The Italian Treasury has raised a record €22 billion during its latest bond sale, which is a sign of confidence returning following stimulus measures from the ECB and the possibility of a European recovery fund being put in place.

On the Dollar front, the market chose to focus on unemployment claims data from yesterday which came out worse than anticipated. The number of US workers seeking unemployment benefits is now nearly at 40 million which is almost a quarter of the US workforce. This led to the greenback losing some ground against both the Euro and Pound. However, overnight there were renewed fears that China’s decision to implement a new security law in Hong Kong could escalate tensions between the US and China which led to the Dollar strengthening against the Pound. China has said that if there is any foreign interference in Hong Kong then they will retaliate. President Trump has mentioned that if there is a second wave of cases of the coronavirus then he will avoid reintroducing lockdown measures and will let the economy stay open.