Today at 11am, EU chief negotiator Barnier will hold a press conference regarding the latest round of trade negotiations with the UK. With progress still limited during these talks, the market does not expect much positivity from Barnier. Consumer confidence data in the UK came out worse than expected yesterday although this was largely ignored.
With the Euro weakening this morning, the Pound has managed to recover most of its losses seen in the past day whilst Sterling continues to make gains against a weaker Dollar.
Yesterday, the Euro strengthened after the ECB chose to increase the size of their pandemic emergency purchase programme (PEPP) by €600 billion which was more than the €500 billion that was expected. The ECB also revised its growth forecasts showing a contraction of 8.7% this year, but expansion of 5.2% next year. This morning, German factory orders showed a decline of 25.8% which is significantly worse than 20.0% that was predicted. As a result, the Euro has weakened this morning against the Pound. The German Bundesbank see their economy shrinking by 7.1% this year which has added to this.
US unemployment claims released yesterday came out worse than expected which led to the Dollar weakening further against the Euro and the Pound. This afternoon, US employment data including non-farm payrolls and the unemployment rate will be released at 1:30pm which is likely to cause some volatility for the greenback. Overall, the Dollar has been effected by protests in the US and lockdown restrictions easing leading to weakness.