Fears about a second wave of coronavirus cases in the UK has kept demand for the Pound low for the time being. With the next round of post-Brexit trade negotiations due to begin in a few weeks’ time, the market has turned its attention to tomorrow mornings Bank of England interest rate announcement and monetary policy statement. Analysts expect the central bank to keep interest rates on hold whilst also keeping its level of quantitative easing unchanged although any comments from Bank of England Governor Bailey will be scrutinized by the market. The Pound remains strong against the Dollar but weak against the Euro.
Yesterday, Spanish unemployment change came out better than expected with 89,800 people finding jobs for the month of July compared to expectations that 19,500 jobs would have been lost overall. This kept the Euro strong against the Pound and the Dollar throughout the day. Eurozone retail sales are due to be released at 10am which may cause some short-term volatility for the common currency.
US factory orders beat forecasts at 6.2% compared to 5.1% that had been forecasted. Nonetheless, the Dollar remains weak against both the Pound and the Euro. US Treasury Secretary Mnuchin has said that White House negotiators and congressional Democrats will work ‘around the clock’ in order to reach a deal for the next coronavirus stimulus bill although the final figure will not be ‘anywhere close’ to $3.4 trillion that Democrats are looking to achieve. Non-farm employment change figures will be released at 1:15pm whilst ISM manufacturing PMI data is also due at 3pm. The price of gold has risen to above $2,000 for the first time with investors turning away from the Dollar in search of other safe-haven assets.