The dollar has been treading water ahead of the release later this evening of the minutes of the Fed meeting on 31st July at which it cut its policy rate 25bps. Markets will be gaging to what extent there was dissent or support for the 25bps cut within the voting FOMC members and ultimately whether this was a an “insurance” policy cut” or the likely beginning of a longer rate cutting cycle.
The story for Sterling today remains the same with the currency still under pressure. Sterling is down about 0.4% against both the Dollar and Euro ahead of Prime Minister Johnson’s meeting this evening with German Chancellor Merkel. Johnson is expected to warn Merkel that if the EU refuses to remove the Irish backstop from the Withdrawal Agreement the British Parliament is likely to once again vote against the draft Brexit deal. While Merkel has hinted that a discussion could be had, European Council President Tusk said yesterday that the backstop’s inclusion was non negotiable, a view echoed by French officials including President Macron.
