After what was dubbed Super Saturday by the media the UK's pubs and restaurants reopened much to the delight of many across the country. Social distancing measures were also reduced which allowed hairdressers to also reopen.

In terms of the immediate impact on exchange rates this is likely to have little impact on sterling but the good news is that the UK economy appears to be getting back to business which is encouraging as it shows that life after lockdown is moving in the right direction.

The over riding factor influencing the pound at the moment appears to be what is happening with the Brexit talks which are ongoing. Following the latest negotiations held between the UK and the EU regarding a post-Brexit deal there are still differences between the two parties. The UK's chief negotiator David Frost has claimed that the are a 'number of different issues' that the two camps cannot agree on at the moment.

 

Sterling Gains Short-lived

The UK has so far been forthright in its stance that it will not extend the talks past the December deadline and so the risks remain that the UK could end up leaving with a no deal Brexit.

Whenever the chances of this happens this has often resulted in weakness for the pound so the progression which clearly continue to have a big influence one the value of Sterling in the weeks and months ahead.

During the lockdown the discussions were being held by video conferencing but during the next few weeks face to face talks will resume.

This week the talks will continue in London whereby EU chief negotiator Michel Barnier wants 'parallel progress' with the negotiations with a 'level playing field' between the two parties. 

Euro News

Over the weekend ECB president Christine Lagarde held a webinar covering the recent period. The president has claimed that inflation will fall and said 'the inflation dynamic will necessarily be impacted, probably with a disinflationary, deflationary aspect at first, then inflation dynamic.' Again this has done little to impact Euro exchange rates but it is a glimpse of a bleak future for the Eurozone's economy in the months ahead.

With the ECB already having pumped in huge amounts of money to support the Eurozone during this time the questions remain as to was it enough and how much more is due to come?

US Dollar

With the Coronavirus continuing to spread in the Americas Mexico has now gone into 5th place as the biggest affected country worldwide. As the risk of Covid-19 continues the has caused the US Dollar to strengthen against the Pound. 

After  two months of recovery in the jobs market since May the US jobs market has seen a recovery of more than a third since the huge drop felt in April.

Some states in the US have halted their reopening plans and whilst the uncertainty continues this could help the US Dollar owing to its safe haven status.

Later this afternoon the US will announce their latest PMI Services data as well as manufacturing data. The data covers June when the US was coming out of lockdown so this could provide some evidence as to how quick the recovery may be.

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