Last week, the British Pound saw a surge versus a range of currencies, culminating in a close to multi-month high versus the Euro and the Dollar. Looking ahead, this week’s key event for GBP investors will be the release of the most recent UK inflation data on Wednesday. In the event that the UK’s CPI stays at 2% for a second month running, higher anticipation of a rate decrease by the BoE in August may cause Sterling to decline from its recent highs.
Last Friday saw the Euro hit its highest level against the Dollar in five weeks, but a consolidative decline could occur in the next few days. The European Central Bank’s newest policy decision, which is expected to be announced on Thursday, is actually the main test for the Euro. Interest rates won’t move, but the markets will be curious to see if the Bank will make another cut in September. The Euro might face pressure if the ECB signals such a move.
Following the attempted assassination of former US President Donald Trump over the weekend, the US dollar saw some safe haven bids. Experts predict that the shooting will improve his prospects of defeating Joe Biden, which could ultimately be advantageous for the dollar. Later this week, Fed Chair Jerome Powell is expected to provide additional guidance to the dollar in other areas.
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