The pound weakened slightly against both the euro and the dollar yesterday. This was due to some brief strength from the dollar and worries over a second coronavirus wave. Anticipation ahead of the Bank of England’s meeting tomorrow also meant that sterling’s gains were limited.
This morning, sterling is weaker against the euro but still at a strong level against the dollar.
Later this morning, Services and Composite PMI data will be released, which is considered a significant indicator of how the economy is doing. Both are expected to show a big improvement due to the re-opening of businesses in recent weeks.
Sources in Brussels have reported that the European Union is softening its demand that Britain follow EU state aid rules after it leaves the bloc, in order to break the Brexit impasse. The compromise would mean the UK is free to settle its own state aid disputes with struggling companies post-Brexit, rather than having to follow EU rules from the outset. Brexit talks are due to begin again on the 17th of August.
