So far this week, the US dollar has lost 0.32 percent against a bundle of its main competitors, falling for the second consecutive week.

Last week, US President, Donald Trump confirmed that he is infected with the coronavirus. Despite the concerns regarding the health of the president, Trump was finally discharged from the hospital, returning to the oval office this week. According to his doctor, the president has had no symptoms for more than 24 hours, while being fever-free for more than 4 days.

Many criticized Trump’s late behavior, given his tendency to underplay the virus. In any case, he seems to be doing well and took the opportunity to announce his decision to withdraw from the stimulus talks with the Democratic party, promising to pass a bill after the November elections.

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major stimulus bill that focuses on hardworking Americans and small business,” he posted on his Twitter account.

This caused unease across the US stock markets, which closed in the negative territory at the end of Tuesday’s session.

Afterward, he said on his Twitter account that he is willing to sign a stand-alone bill for stimulus checks. He also called the Democrats to approve a 25 billion dollars stimulus for the airline sector, as well as a paycheck protection program for small businesses that is worth 135 billion dollars.

Trump’s latest announcements relieved investors, making US stocks recover from the previous session’s losses.

The United States continues dealing with the Covid-19 sanitary crisis, which so far has killed 216,784 Americans and has infected 7,776,224. The United States leads the world in the number of infections, followed by Brazil, India, Russia, and Colombia. Cases are currently surging in 39 states, as states like Wisconsin have doubled its number of reported cases in the last month, all while Trump’s latest declarations about the issue keep alarming the medical community.

This week the markets received a few relevant pieces of information about the state of the US economy. On Monday, Markit economics released the Services PMI for September, which stood at 54.6, remaining unchanged from the previous month’s figure and signaling an expansion of the sector. The composite PMI figure signaled a slightly lower expansion of the business sector, standing at 54.3 in September, below August’s 54.4 and lower than what the analysts’ expected.  According to the Institute for Supply Management, the services PMI stood at 57.8, improving from August’s 56.9 and over the analysts’ expectations, who foresaw it to be at 56.3.

On Tuesday, the Bureau of Economic Analysis reported a 67.1 billion dollars deficit in the trade balance, after being at -63.4 billion in the previous month, and higher than the analysts’ expectations, who foresaw it to be at -66.1 billion. The Federal Reserve Chair, Jerome Powell called for additional fiscal stimulus, saying that it’s preferable to do too much than too little and claiming that economic recovery will be stronger and faster if monetary policy and fiscal policy “continue to work side by side”.

On Wednesday, the Federal Reserve released the FOMC minutes. In the minutes, the bank’s monetary policy committee stated that they are not willing to raise the interest rates until the economy reaches full employment and inflation reaches the bank’s 2 percent target. The Federal Reserve officials also expressed their concerns about the threat that the lack of help from the Congress poses for economic recovery.

Last week, the pound sterling recovered against the US dollar, gaining 0.98 percent and closing Friday’s session at the 1.3040 level.

The pound sterling benefited from the optimism that took over the market regarding the post-Brexit talks. EU Brexit Negotiator, Michel Barnier said that a deal with the UK government is within reach, while a new round of negotiations were announced.

On Sunday, the Bank of England’s Governor, Andrew Bailey made a reference to the possibility of setting negative cash rates, though according to his comments the bank would only be willing to do so when the UK experiences an economic upturn.

“Our assessment of negative interest rates, from the experience elsewhere, is that they probably appear to work better in a more wholesale financial market context, and probably better in a nascent economic upturn,”  he said.

On Monday, the Bank of England’s Deputy Governor, Jon Cunliffe said that British hedge funds that rely on borrowed money to fund their financial activities should be scrutinized, given that they are a potential threat to financial stability.

On Wednesday the bank published the Consumer Price Index, which stood at 0.4 percent in September (month-to-month), after dropping 0.4 percent in the previous month and below the analysts’ expectations, who foresaw it to be at 0.5 percent. In yearly terms, the index stood at 0.5 percent, higher than the previous month’s 0.2 percent and remaining in line with the analysts’ expectations.

The Retail Price Index went up by 1.1 percent, below the analysts’ expectations who foresaw it to be at 1.2 percent and higher than the previous month’s 0.5 percent. The Producer Prices Index Core Output went up by 0.3 percent, after being at 0 percent in the previous month and over the analysts’ expectations, who foresaw it to be at 0.1 percent.

On Thursday, the Confederation of British Industry released the Industrial Trends Survey for October, which showed an improvement from September’s -48 percent, at -34 percent and way better than the analysts’ expectations, who foresaw it to be at -45 percent. Consumer confidence dropped to -31 in October, after being at -25 in September and worse than the analysts’ expectations, who foresaw it to be a -28.

The Bank of England’s  Chief Economist, Andy Haldane said during a conference at the National Institute of Economic and Social Research that the UK’s household spending is remarkably resilient, pointing out the US case and claiming that the UK could follow the same path.

On Friday, the Office for National Statistics published that Retail Sales went up by 4.7  percent, after climbing by 2.7 percent in August and way better than the analysts’ forecasts, who expected it to rise by 3.7 percent. In monthly terms, retail sales went up by 1.5 percent, after being at 0.9 percent in the previous month, and higher than the analysts’ expectations, who foresaw it to be at 0.4 percent.

IHS Markit reported that the preliminary Manufacturing PMI for October stood at 53.3, signaling a slower expansion of the sector compared to September’s, which stood at 54.1, and better the analysts’ expectations, who foresaw it to be at 53.1. The services PMI was at 52.3, below the analyst’s expectations, and showing a slower expansion of the sector, as the previous month’s figure stood at 54.

On Thursday, the Office for National Statistics reported that manufacturing production went up by 0.2 percent in September after being at 0.9 percent in August and rising less than analysts’ expectation of 1 percent. 

The pound sterling went up for the second consecutive week last week, climbing 0.23 percent against the US dollar and closing the week at the 1.3186 level.

This week has been a crucial one for the post-Brexit trade deal talks, though both sides have been unable to reach an agreement. Britain’s chief Brexit negotiator David Frost insisted that the UK is not changing its position in the coming trade talks, while it doesn’t seem that the EU is going to give up on its demands either. The Internal Market Bill remains a controversial talking point, as Ireland expects that the trade deal won’t be ratified if the UK decides to impose it.

“Even if we do get a new trade deal negotiated on both sides, if the British government is determined to continue with their Internal Market Bill to re-introduce parts of that bill that were removed by the House of Lords this week, then I think this is a deal that won’t be ratified by the EU,” said Ireland’s Foreign Minister Simon Coveney.

The Office for National Statistics reported that the unemployment rate for September, which stood at 4.8 percent, remained in line with the analysts’ expectations and exceeded the previous month’s 4.5 percent increase.

The Claimant Count Change shrank by 29.800, after going down by 40.200 in the previous month and below analysts’ expectations of 36.000. The Claimant Count Change rate was at 7.3 percent, after being at 7.4 percent in the previous month.

The British Retail Consortium published the like-for-like retail sales, which went up by 5.2 percent, lower than September’s 6.1 percent and below analysts’ expectations of 8.4 percent. Average earnings including bonus went up by 1.3 percent in September, after going up by 0.1 percent in August, and higher than analysts’ expectations of 1.1 percent. Average earnings excluding bonus climbed by 1.9 percent, after going up by 0.9 percent in the previous month and higher than analysts’ forecast of 1.5 percent.

On Thursday, the Office for National Statistics reported that manufacturing production went up by 0.2 percent in September after being at 0.9 percent in August and rising less than analysts’ expectation of 1 percent. In annual terms, it dropped by 7.9 percent after going down by 8.3 percent in the previous month and below analysts’ expectations of 7.4 percent.

Industrial production rose by 0.5 percent after increasing by 0.3 percent, less than analysts’ expectation of a 0.8 percent increase. The gross domestic product rose less than expected, at 15.5 percent (quarter-on-quarter) in the third quarter and after shrinking by 19.8 percent in the previous quarter. In annual terms, the gross domestic product went down more than expected, falling by 9.6 percent after dropping by 21.5 percent in the previous quarter.