The biggest losers of the day instead came in the emerging market universe, with a host of currencies losing ground against the US Dollar on concerns over global trade. The Mexican Peso, Canadian Dollar and South African Rand were a few of those hardest hit. With concerns over Italian politics mostly out of the way for now, investors are refocusing on fears over a global trade war after Mexico claimed that it would be imposing a 20% tariff on US pork imports. This comes in retaliation to similar tariffs placed on steel and aluminium by the Trump administration, all of which has caused investors to fret over the future of the North American Free Trade Agreement (NAFTA).

April trade balance data out of the US this afternoon is not expected to rock the boat. In the absence of any surprises here, the rest of the week looks relatively barren in terms of macro news. With no economic data out of the Eurozone today, attention in Europe will instead turn to Thursday’s revised GDP figures.

Pound recovers, hits highest level in two weeks

Sterling had a fairly up and down day on Tuesday. The currency rallied by around half a percent following the release of a far more encouraging services PMI, and while it gave back around half of said gains during London trading, rallied again during the Asian session. The latter move was largely driven by a weak US Dollar with uncertainty over the Brexit negotiations continuing to cloud the outlook. Investors were also cautious over whether one isolated upbeat piece of economic news would be enough to convince BoE policymakers of the need for higher rates later this year. BoE rate-setter, Tenreyro, suggested earlier in the week that ‘a few’ rate rises were needed in the UK, although the timing was open for debate.

One of the members that voted in favour of an immediate interest rate hike at the Bank of England’s most recent meeting in May, Ian McCafferty, will be speaking today. Aside from that, Brexit related news could continue to drive the Pound in the coming days.