Fresh Reports on EU Brexit Compromises Emerge, Could Underpins Pound Sterling's July Recovery against Euro and Dollar

The British Pound retains a buoyant tone as markets move through the second half of the week courtesy of a mixture of improvements in sentiment towards EU-UK trade negotiations and the announcement by the Government of a set of new measures designed to underpin the economic recovery.

The British Pound held onto the sharp gains registered over the course of the past 24 hours following the Treasury's Summer Economic Update where it was announced the Government would pay employers £1000 for every worker who returns to their job after the furlough scheme expires at the end of October.

The Pound led major currencies in a rebound against the Dollar Tuesday as another round of Brexit trade talks got underway and Chancellor Rishi Sunak's mini budget loomed large, although it could see substantial further gains on any progress in the deadlocked negotiations with the EU. 

The British Pound was easily the best performing major currency on Tuesday, July 07 with gains being recorded against all its competitors in the G10 space.

The British Pound starts the new week registering losses against the Euro, Australian and New Zealand Dollars but is higher against the U.S Dollar, Yen and Franc courtesy of a rally in global stocks and commodity prices.

Friday's round of Brexit trade negotiations were called off on Thursday, a move that appears to have contributed to a fading back in the British Pound's short-term recovery rally.

A highly anticipated announcement on how the Government intends to spend the economy out of its coronacrisis slump left foreign exchange markets distinctly underwhelmed, ensuring the British Pound's ongoing trend of devaluation remains intact.

The British Pound was seen trading higher against the Euro, Dollar and other major currencies as it unwound some of its oversold conditions, aided by some significant options expiries and month-end rebalancing.