esterday’s move in the Dollar was not fuelled by any noticeable economic or political factors. Investors perhaps took advantage of a soft greenback to profit take ahead of the Jackson Hole symposium later in the week where Janet Yellen and Mario Draghi will both be making appearances. ECB President Draghi will be the headline act, although he is expected to disappoint the market and fail to hint that a tapering in the central bank’s quantitative easing programme is on the way. We think that risks to EUR/USD are actually skewed somewhat to the downside, particularly given current positioning.

Fears over the Brexit negotiations were partly to blame for Sterling’s decline on Tuesday. The UK currency has now lost near 9% of its value against the Euro since mid-April alone and Sterling bulls will now be hoping Thursday’s GDP numbers provide some respite from the currency’s sharp sell-off.

The Euro also retraced all of its gains so far this week yesterday, receiving little help from the monthly ZEW economic sentiment survey. The main German index from ZEW was fairly dire declining for the third straight month to 10.0 from 17.5, suggesting businesses in Europe’s largest economy are less optimistic about the future. Sentiment in the Eurozone slumped sharply in August with the index declining to 29.3 from 35.6.

We now look to this morning’s business activity PMIs out of the Eurozone as the next major event risk for the currency. The composite index is expected to show a modest slowdown in August following a decline in the manufacturing sector. Federal Reserve member Kaplan will also be speaking ahead of Friday’s far more significant appearance from Chair of the Federal Reserve Janet Yellen.