Good morning,
Overnight, the euro extended its gains across the board off the back of the long-awaited coronavirus response package, with some 75bn in relief going into markets by way of loans and grants – as mentioned by Jack’s update yesterday. Since then, the single currency has pushed the dollar all the way to 2019 highs, exploding upwards by some 3.30% since the start of the month as the sentiment that a deal would be done finally came true. To highlight how dominant the euro is now becoming, at the start of play yesterday, the pound was pushing higher along with the usual increased stock market flows – with the S&P index pushing to its highest mark since the 21st of February; yet, at the end of the days’ trading, the pound lost all of its intra-day gains forcing it back into a bearish channel.
As far as it goes for sterling, much of the focus will fall on a double-header of both retail figures for June and Brexit negotiation announcements due out on Friday. Pound traders will be hoping that the initial easing of lockdown that began in June will produce some good news for the UK economy, especially after its huge debt burden was revealed this week. If the numbers are indeed good, should this pair with positive sounds regarding Brexit talk progress, then it could be a more upbeat end to a tricky euro-dominating week. However, should the figures flop, and it is back to the drawing board in the talks, we could easily be back to the 1.09 area on GBP/EUR and 1.2575 on GBP/USD before the week is out.
Have a great day. 
Author: Joshua Haden-Jones, Senior Relationship Manager
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