Sterling Falls Ahead Of Meeting

GBP

Sterling fell on Wednesday ahead of the meeting between Boris Johnson and Angela Merkel. Despite hints from Merkel that there might be room for renegotiation over Brexit and the Irish border issue, investors still remain worried.

Merkel had said previously that she was open to “practical solutions” in regards to the Irish backstop, but that the wider withdrawal agreement was to be left untouched. Merkel has also alluded to wanting to make the Brexit exit as smooth as possible.

USD

Yesterday saw the release of the Federal Reserve’s latest committee minutes, and we saw that members were split on the idea of an interest rate cut. Despite the 25 basis point deduction, some members would have preferred a 50 basis point cut as a way of combatting the low inflation number. Other members felt the rates should be kept steady, judging that the real economy was in a relatively good place.

Key Announcements

08.30 – EUR: German Markit Manufacturing PMI (Aug); expected to decrease to 43 from previous 43.2
08.30 – EUR: German Markit PMI Composite (Aug); expected to decrease to 50.5 from previous 50.9
09.00 – EUR: Eurozone Markit PMI Composite (Aug); expected to decrease to 51.2 from previous 51.5
12.30 – EUR: ECB Monetary Policy Meeting Accounts

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