UK Food Standards under Brexit threat

PAPHOS, Cyprus - July 25, 2017 - PRLog -- UK Food Standards under Brexit Threat

Liam Fox and talks on a potential post-Brexit trade deal with the US are in the spotlight today. The International Trade Secretary is visiting Washington in order to start discussions for a deal that will boost trade relationships between the two countries. UK workers' unions and firms have warned that the UK might be rushing into this, without being properly prepared for the negotiations. The House of Lords also warned that the standards of UK food products could come under pressure by the influx of cheaper and lower standard food products as a result of a future trade deal with the US.

In the Eurozone, Greece made its first bond sale in three years. The Mediterranean country is still in a bailout programme, supported by the European Union (EU) and the International Monetary Fund (IMF). The Greek Prime Minister, Alexis Tsipras, has expressed the opinion that the country is back on the road to normality. Pierre Moscovici, a European Commissioner, said that "confidence in Greece is really coming back. Today's positive bond sale is a signal for that."

Pound Sterling – UK Markets

Today, Sterling dropped against the Euro with the exchange rate set at €1.11, while it strengthened against the US Dollar trading at $1.30. The absence of economic data being released today in the UK has made traders shift their attention to Andy Haldane's speech, due later in the evening. Haldane, who is a chief economist in the BoE and a member of its Monetary Policy Committee, has repeatedly said that it's time for the BoE to raise borrowing costs.

Liam Fox, the International Trade Secretary, is on a two-day visit in the US capital to meet with his US counterpart, Robert Lighthizer. The two men will discuss the possibility of a post-Brexit trade deal between the UK and the US. The UK government has been warned by firms and workers' unions not to rush into securing an agreement too quickly. The British Chambers of Commerce (BCC) director, Adam Marshall, suggested that the UK should seek ways to increase trade between the two countries and make custom procedures easier rather than negotiate a comprehensive trade deal.

According to the BoE's director for financial stability Alex Frazier, rising household debt can be dangerous to borrowers, lenders and everyone involved in the UK economy. Frazier said that "lenders have not entered, but they may be dicing with the spiral of complacency." The BoE has already announced that lenders have been forced to hold more capital in their vaults in order to be more resilient to losses on their loans.

US Dollar – US Markets

The US Dollar lost ground against the Euro with the exchange rate set at €0.85. The Federal Open Market Committee's (FOMC) two-day meeting will begin later today in Washington, which, according to market experts, will not produce any updates regarding interest rates.

However, experts are looking forward to reading the post-meeting statement for any clues about the Fed's balance sheet normalisation. A Barclays report says that the bank will be looking for any hints in the FOMC's statement that might reveal that the normalisation programme will begin in September. It should be noted that in June's statement, the FOMC was unclear about the exact schedule, commenting that normalisation will begin "this year."

IHS Markit published its July US PMI surveys which, according to its economists, showed that the US economy is gaining growth momentum, and enjoyed the strongest monthly improvement in business activity since the beginning of the year. While the services PMI remained stable in July, the manufacturing PMI rose, reaching a four-month high, taking advantage of the increase in new orders and employment number.

Euro – European Markets

The Euro gained ground against the US Dollar with the exchange rate set at $1.16. The July IFO index, that was published in Germany, and the first Greek bond sale after 3 years, seemed to help the single market currency in its course upwards.

The IFO index in Germany showed that the strong recovery of the economy continued in July. The index, which is considered the most prominent leading indicator, recorded an increase for the sixth month in a row. According to an ING report which commented on the result, the acceleration in the German economy is not the result of strong public and private consumption, but also the outcome of an unexpected industrial revival and stronger investment.

The Greek government has a reason to be glad today, since it performed its first bond sale after three years. The five-year bond is Greece's first attempt to cover its financial needs without counting on the EU, ESM and the IMF's bailout loans.

Other Currencies – Highlights

The Pound strengthened against the Australian Dollar, trading at 1.64 AUD. According to a report, published by the Amplifying Global FX Capital (AmpGFX), Australia has succeeded in improving its external balances over the last year. The country's economy has moved from a merchandise trade deficit of around 1.5% to 2% of the GDP to a surplus of 1.7% in May. Tomorrow morning, the Australian Bureau of Statistics will release data regarding inflation in the second quarter of the year, which is expected to affect the Aussie.

Sterling rallied against the New Zealand Dollar, trading at 1.75 NZD. Analysts at Westpac believe that the Reserve Bank of New Zealand (RBNZ) isn't going to reveal something new regarding the hike of its benchmark interest rate, in its upcoming August Monetary Policy Statement. Experts believe that the RBNZ will keep the same policy prescription of low interest rate levels for an extended period.

https://www.currencysolutions.co.uk/news/uk-food-standard...