The Pound has continued to remain under pressure with the number of coronavirus cases increasing across the UK. The third national lockdown is expected to slow the UK’s economic recovery with expectations rising that the Bank of England could cut interest rates into the negative territory. Yesterday, UK final services PMI data was revised downward which also put some downward pressure on Sterling for the time being.
German factory orders data released earlier this morning came out at 2.3% compared to -0.6% that was forecast which gave the Euro continued support against the Pound and the Dollar. Italian PM Conte has seen relations sour with leader of the Italia Viva party Renzi after the former PM threatened to withdraw his support of Conte’s coalition government. Renzi has accused Conte of trying to centralise control of the EUR 209bn that Italy secured from the EU recovery fund.
The Dollar remains weak with a Democrat victory in Georgia giving them control of the Senate, boosting hopes of more fiscal stimulus being introduced in the US. FOMC meeting minutes released yesterday evening showed that members decided to keep their quantitative easing program unchanged, with some suggesting that more stimulus may be needed in the future. US unemployment claims are due at 1:30pm which will be closely watched by the market.