Risking a second wave

Today’s news headlines:

‘Downturn in UK business activity eases sharply in June’. The lifting of pandemic-linked restrictions, which allowed more UK businesses to reopen, has meant that Britain’s economic downturn eased significantly between May and June. The UK’s flash Services Purchasing Managers' Index rose to 47.0 in June from 29.0 in May in the most significant month-on-month increase since the first recorded figure. Analysts at ING are predicting a full economic recovery won’t be possible until 2022 still but there are signs that the UK’s economy could at least return to growth in the third quarter of 2020. (Financial Times)

‘Boris Johnson gambles on lifting lockdown to save UK’s economy’. The UK’s Prime Minister has dramatically lifted lockdown measures in England in a bid to get people spending and save the economy. Scientists were clear in their warnings that we must still exercise caution, or a second wave of cases will be seen in similar circumstances to the US or China. Pubs, restaurants and hotels can all open from July 4th, while the two-metre distancing has been reduced to one-metre. (Bloomberg)

Today's events, rates, and data 

• Risk sentiment prevailed in yesterday’s session as global stocks and riskier currencies gained at the expense of safe-haven assets following upbeat data on business sentiment in the UK, EU, and the US. The US Dollar is headed for a third day of declines against a basket of risk currencies, but there could still be a sting in the tail if the US is unable to contain the latest rise in coronavirus cases.

RBNZ Official Cash Rate: 0.25% vs 0.25% previously
German Ifo Business Climate: 9.00am
US Crude Oil Inventories: 3.30pm

Interbank rates:

GBP/USD: 1.2508
GBP/EUR: 1.1055
EUR/USD: 1.1315
USD/CAD: 1.3550