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The UK’s manufacturing PMI was revised lower from its original flash estimate to a fairly abysmal 48.2, its lowest level since February 2013.

The FOMC statement on Wednesday was quite optimistic. In fact, every single change from the previous statement reflected increased confidence in the outlook.

The Bank of Japan kept its main interest rate and asset purchase programme unchanged, sending the Yen almost 2% higher against the US Dollar overnight.

Significantly, every change from the previous statement was positive and we think the Fed remains on course to hike US interest rates at least once in 2016.

The Fed is caught between the country’s improving domestic economic conditions and a lingering cloud of uncertainty in the global economy following last month’s Brexit vote.

Last week’s dismal PMI data has swayed Weale towards an immediate interest rate cut. Bank of England, Federal Reserve and Bank of Japan all driving currency markets this week.

The first significant UK economic news collected after the Brexit result, the business sentiment indices, were consistent with a UK recession starting this quarter.

The Pound fell sharply this morning on the back of a dismal set of PMI figures for July that showed the first real indication of the impact of last month’s Brexit vote.

The ECB is likely to reiterate its ‘wait-and-see’ stance, looking for additional economic data before committing to extra stimulus measures.

The Brexit vote is perhaps the most significant political event in Europe in the last few decades and has led to one of the most volatile, uncertain periods of currency trading in recent memory. We've revised our G10 forecasts, access them here.