Daily Currency Update

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MPs vote on Internal Market Bill

GBP - British Pound

Last night, despite mounting pressure from the European Union, MP's backed Boris Johnson’s internal market bill, voting in its favour by 340 to 263. MP's defended the bill stating it has necessary safeguards to protect Northern Ireland and the rest of the United Kingdom incase Brexit negotiations break down further.

Johnson has suggested that the European Union are using the withdrawal treaty, agreed in January, to potentially implement trade barriers between Northern Ireland and mainland Britain. It is clear to see the fractious relationship between the United Kingdom and the European Union is strained. This is only adding to the feeling that a no-deal Brexit could be a distinct possibility and we will be on World Trade Organisation terms next year.

This morning Britain’s unemployment rate rose to 4.1% for the period of May to July. This is the first time the unemployment numbers have increased since lock down began in March. However, it is important to consider that the furlough scheme will be ending in a matter of weeks.

Yesterday sterling did stage a small recovery against the euro and the dollar after last week's poor performance. In fact last week was sterling’s worst week for over six months.

Key Movers

Eurozone factories performed better than most expected in July. Yesterday morning industrial production printed a number of 4.1% as the economic recovery continues throughout Europe. There are a couple of concerns however, with industrial production in June printing 9.5% it does show the recovery is slowing. With increased cases of Covid-19 across Europe again and new lock down measures being put in place, the Eurozone is definitely at a cross-roads.

The market is in anticipation of the Fed meeting tomorrow which will be followed through the week with Empire State and Philadelphia Fed surveys and US retail sales.

Expected Ranges

GBP/USD: 1.2820 - 1.2970 ▲

GBP/EUR: 1.08 - 1.0920 ▲

EUR/USD: 1.1820 - 1.1980 ▲