Speaking during his press conference after the ECB announced it was leaving monetary policy unchanged, Draghi remained cautious over the outlook for the currency bloc. He stated that some signs of weakness were beginning to show in the Eurozone economy. Draghi also appeared concerned over the looming threat of a global trade war, saying that an escalation could change the picture altogether, if it snowballed. Currency traders latched onto this cautious tone, sending the Euro over half a percent lower to its weakest position so far this week.

Brexit concerns continue to weigh on Pound

Ongoing concerns over whether the UK would be able to come to an agreement with the EU before the October Brexit deadline continued to weigh on the Pound yesterday.

Sterling gave up the entirety of its gains so far this week versus the broadly stronger US Dollar, with assurances from Theresa May in the event of a ‘no-deal’ provided little comfort for investors. Concerns that the UK government is no closer to coming to an agreement completely eliminated any headwinds to Sterling from the prospect of higher interest rates from the Bank of England, which continues to look all but certain to hike rates when it meets next week.

US second quarter growth to be released

The aforementioned broad Dollar strength came largely off the back of yesterday’s dovish ECB meeting, with most economic data out of the US coming in below consensus. Orders for durable goods was particularly disappointing, with the data point increasing by a mere 1.0%, after economists eyed a 3.0% print.

Next up for the currency will be this afternoon’s second quarter growth figure, which is expected to show that the US economy grew by a very impressive 4.1% annualised in the three months to June. A confirmation of this number would highlight the growing divergence in economic performance between the world’s largest economy and almost all of its major peers, something that we believe will keep the US Dollar well supported in the coming months.