The Pound has come under renewed pressure as of late with the EU suggesting that if the UK wants to extend the Brexit transition period they will have to ask by 30th June, with UK chief negotiator Frost reiterating that they will not seek to extend trade negotiations. Prime Minister Johnson’s approval ratings have been hit after he refused to sack his chief advisor Cummings for failing to comply with lockdown restrictions. The market is awaiting the start of the next round of negotiations with the EU next week, with comments from both parties likely to be scrutinized.
The Euro lost some strength against the Dollar yesterday as ECB President Lagarde suggested that the Eurozone is facing a recession in-line with the most pessimistic of forecasts. However, the common currency did make some gains against the Pound as the EU Commission has proposed a €750 million recovery fund as part of further economic stimulus worth a total of €1.1 trillion that is expected to be announced at the next EU budget. Furthermore, Italy is reported to be getting €82 billion worth in grants under these proposals which will be a boost for the Eurozone’s third-largest economy.
US manufacturing data came out better than expected yesterday afternoon, which gave the Dollar a boost against both the Pound and Euro. In addition, the Dollar’s safe-haven status has come into focus again as President Trump has warned of further sanctions on China although any further details will be released later in the week. Both preliminary data for US GDP and unemployment claims are set to be released at 1:30pm today, which is likely to cause some short term volatility for the greenback.