The European Central Bank will hold their latest monetary policy meeting today. Whilst interest rates are expected to be kept on hold, it’s thought that discussion will centre around economic projections and concerns over the rising euro, which were expressed recently by Chief Economist, Philip Lane.
Brexit news continues to impact the pound, which is still weaker against the euro this morning. The EU have called for emergency talks to discuss the UK’s proposed changes to the Withdrawal Bill, which the Prime Minister defended in Parliament yesterday.
It’s difficult to predict where Brexit negotiations, and the pound, will head next. Make sure you lock in your exchange rate with a forward contract today, so your business isn’t affected by uncertainty. Speak to your Business Trader on 020 7898 0500 to get started.
GBP: Brexit continues to impact pound
The pound is still weaker against the euro this morning as controversy over Brexit continues. However, after news that the EU will not suspend Brexit talks with the UK, the pound strengthened slightly against the dollar yesterday. It is still in a stronger position against the dollar this morning due to a recovery in the global markets.
The Prime Minister defended the new ‘Internal Markets Bill’ in Parliament yesterday, which seeks to change parts of the Withdrawal Agreement and breaks international law. Boris Johnson said that the bill would protect the UK’s internal market and the Northern Ireland peace process. However, several critics, including some senior Conservative MPs, argue that the bill does the opposite. Many also say that breaking international law will undermine the UK’s reputation globally.
Emergency talks over the bill’s potential impact in Ireland will take place today between Michael Gove and EU official Maros Sefcovic.
Research carried out by the British Chambers of Commerce suggests that businesses aren’t prepared for post-Brexit trading due to the government’s lack of clarity on the matter, as well as due to unforeseen circumstances caused by COVID-19.
EUR: ECB expected to keep rates on hold
The ECB will hold their monetary policy meeting and press conference today, where they are expected to comment on the outlook for the European economy, any policy changes and recent concerns over the rising euro.
The euro strengthened yesterday and is still strong this morning on reports that the ECB will only make slight changes to projections for inflation and output, showing that they are confident in their outlook for recovery. There could also be policy changes designed to drive the euro lower after officials expressed worries over the recent rise of the single currency. The press conference will take place today at 1:30pm.
USD: Jobless claims data to be released today
The dollar weakened against the euro and also fell slightly against the pound yesterday. Initial jobless claims data will come in for the US today, and the figure is predicted to come in lower that the reading from last month.
The greenback is also weaker this morning due to an uplift in the global markets. This is possibly due to optimism surrounding the upcoming ECB meeting. Tomorrow, inflation rate data will be released for the US.