The Pound remains weak as both the UK and EU have admitted that they remain far apart over some issues during trade negotiations. EU chief negotiator Barnier has said that a deal looks ‘unlikely’ at this point due to the UK’s position over fishing rights and competition rules. UK negotiator Frost believes that ‘considerable gaps’ remain but a deal is possible although Prime Minister Johnson’s deadline of the end of July will be missed. Frost has urged the UK to prepare for all scenarios including a no-deal Brexit. Both parties are due to meet in London next week although the next official round of trade negotiations will begin in mid-August. UK retail sales have beat expectations this morning at 13.9%.

The Euro is still strengthening against the Pound and Dollar as the market remains optimistic about the Eurozone economy after EU member states agreed to a recovery fund worth €750 billion. Eurozone consumer confidence was released at -15 which is worse than the forecasted -12 figure. Nonetheless, this has little effect on the common currency. German manufacturing and services PMI data both beat the market’s expectations this morning, whilst French services data also surprised the market.

Yesterday, US unemployment claims were released worse than anticipated at 1416K compared to the forecasted figure of 1300K leading to the market having a more pessimistic tone over the US economic recovery. Despite tensions between the US and China increasing further as the US consulate in Chengdu has been shut down, the Dollar has failed to capitalize on its safe-haven status. The Dollar remains weak against both the Pound and a stronger Euro.