Sterling came under pressure yesterday when Governor Andrew Bailey appeared to open the door to negative interest rates, somewhat contradicting Deputy Governor Ramsden’s comments on interest rates the previous day. Bailey said the Central Bank had not yet reached an agreement on whether or when to set interest rates below zero for the first time. This was the latest in several comments made by policymakers in the past week and confused rather than clarified the Bank of England’s position. Earlier this morning UK GDP came in slightly better than expected. The final reading for the second quarter was -19.8% vs the -20.4% expected.

The Euro has held on to its recent gains, seemingly unaffected by worries for the Eurozone’s economic performance and an increase in coronavirus infections. Although recent releases of German and Spanish inflation data reflected weaknesses in their economies and policymakers seemingly worried about its strength, the single currency has gained for two consecutive days.

The Dollar was little changed in early trading as the market assessed the first televised debate between republican President Trump and Democrat Joe Biden, ahead of next month’s election. Analysts said neither candidate emerged with a decisive advantage. US house speaker Nancy Pelosi said on Tuesday she hoped to have a coronavirus aid deal with the Whitehouse this week after speaking with Treasury Secretary Steve Mnuchin and further talks were planned for today.