After a busy start to the trading week, as mentioned by Jack yesterday, Tuesday holds few major data announcements that are likely to shake the status quo, with much of the anticipation reserved for tomorrow, Thursday and Friday. Admittedly, the Chancellor’s Summer Statement is more eagerly awaited by British businesses keen to hear more regarding the current furlough scheme plans for the next quarter; however, the foreign exchange market will still certainly keep an eye on proceedings. Realistically, unless there are new policy announcements that can improve the UK’s recovery chances in the short term, much of the statement will just be a repeat of Johnson’s “New Deal” infrastructure announcements last week; namely, the same fiscal pledges just brought forwards in their delivery time.
Thursday and Friday will yield another round of Brexit talks, with markets hopeful that the UK negotiators can resist the urge to get up and leave as they did last week. To make things worse for the pound, it seems markets are now firmly behind the Eurozone response to battling coronavirus’ economic impacts; whilst the UK’s quick action and furlough programme did look cutting edge at the time of its launch, the 750bn euro package being rolled out across Europe has now taken centre stage.
Once again, the pound will be looking for comments, headlines and quotes to drive sentiment – whilst also having a look over its shoulder at localised outbreaks of coronavirus as the UK goes back to shops, pubs and holidays.
Have a great day,
Author: Joshua Haden-Jones, Senior Relationship Manager
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