Sterling Plummets To 2-year Lows

GBP

Yesterday the pound fell towards its lowest levels in more than two years on Tuesday against the backdrop of a worsening economic outlook and rising fears about a no-deal Brexit and a new Prime Minister.

Jeremy Corbyn challenged the next Tory leader to hold another referendum before taking Britain out of the EU, saying Labour will campaign for Remain. Corbyn said the party will take this position to stop "no deal or a damaging Tory Brexit".

Corbyn said Labour was now the "party of choice" when it came to Brexit but he didn’t say what he would do if he won a general election and was placed in charge of the Brexit process. He said he would "make a case" to Parliament in September to get another referendum and in the meantime, Labour will "do everything we can to take no deal off the table”.

We also saw a row erupt between the UK’s ambassador to the US and Donald Trump over some leaked emails, leading to the US president calling him "a very stupid guy". Emails revealed the ambassador had called the Trump administration "clumsy and inept". Downing Street reaffirmed its "full support" for Sir Kim Darroch which now leaves Theresa May facing a full-blown diplomatic standoff with the US.

USD

Ahead of his testimony today at the Semi-annual Monetary Policy Report before the Senate Banking Committee Fed chair Jerome Powell is expected to leave Federal Reserve interest-rate cuts firmly on the table.

The Fed chairman, who has been hectored for months by President Donald Trump for not cutting rates, is expected to repeat language from the Federal Open Market Committee’s June statement that it will “act as appropriate’’ to sustain the economic expansion. The market is expecting the central bank will cut rates at its July 30-31 meeting.

Key Announcements

09:30 – GBP: GDP figure forecast to increase to 0.3%
09:30 – GBP: Manufacturing production expected to increase to 2.2%
15:00 – USD: Fed Chair Powell Testifies
19:00 – USD: FOMC Meeting Minutes