Pound firms against Euro ahead of UK’s Brexit blueprint release
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The Pound slipped to a more than one week low against the US Dollar on Thursday morning, although firmed versus a broadly weaker Euro, amid signs that the EU may be able to move forward with the UK’s latest Brexit proposals.
With no economic news out of the UK over the next couple of days, Sterling will continue to take its cue from political developments. A big test for the Pound will be the EU’s response to the UK’s long awaited White Paper on the future trading relationship, to be released today. This is expected to outline a “comprehensive vision” of how the government wants Brexit to work.
US inflation, ECB minutes to be released today
The US Dollar index traded around its strongest position in a week-and-a-half on Thursday morning, with the currency jumping by around half a percent against the Euro yesterday. Ongoing concerns over trade tensions caused investors to favour the greenback over riskier currencies so far this week. The US Dollar could be set for further gains today, should this afternoon’s US inflation data surprise to the upside. US consumer price growth is expected to rise to 2.9% in June, up from 2.8%.
In the Eurozone, this morning’s German inflation numbers came right in line with consensus, with consumer prices growing by 2.1% on a year previous in Europe’s largest economy. Industrial production numbers, however, surprised to the upside, an encouraging development that suggests the economy of the currency bloc potentially picked up the pace in the second quarter.
This afternoon will see the release of the European Central Bank’s July meeting accounts. With the end date already announced for its QE programme, and the bank making it clear that interest rates are unlikely to be hiked any time soon, meaningful announcements out of the ECB are likely to be few and far between in the coming months.