On Friday, the Pound made significant gains against both the Euro and the Dollar with better than expected flash manufacturing and services PMI data contributing to this in the morning. However, CBI industrial order expectations came out much worse than expected at -44 compared to -34 that was forecasted which weakened Sterling. EU chief negotiator Barnier also mentioned that at this point in time a trade deal between the UK and EU seems ‘unlikely’. Nonetheless, the Financial Times has shared some government analysis that suggests that the UK could see as record-breaking Q3 in terms of economic growth which has kept the Pound from losing all of its gains.
The Euro lost ground against the Pound and Dollar on Friday morning after French and Eurozone flash manufacturing and services PMI data disappointed the market whilst the same figures for Germany showed mixed results. With increasing numbers of new coronavirus cases being recorded across many EU countries, the market will pay attention to how each country copes with trying to avoid a second wave which will no doubt impact the common currency going forward.
US flash manufacturing and services data surprised the market with better than anticipated figures which gave the Dollar some support on Friday afternoon. President Trump has mentioned in an interview that the US ‘don’t have to’ do business with China, raising concerns about US-China tensions. The market is waiting in anticipation for the Jackson Hole Symposium due to start on Thursday. Any comments from Federal Reserve Chairman Powell about the future path of monetary policy in the US is likely to cause some volatility.