Despite appearing to be losing steam, the British Pound is nevertheless supported by the decreasing likelihood of a Bank of England interest rate drop in August. Indeed, earlier this month, BoE Chief Economist Huw Pill pointed out that more work needs to be done before the domestic persistent component of inflation disappears.
After the ECB’s expected policy announcement last week, the Euro gained additional territory than it had lost. In actuality, the probability of a September rate drop have been priced in by the markets at 65%, down from 73% just prior to the announcement. In the near future, the shared currency is probably going to be supported by the ECB’s data reliance strategy.
After President Joe Biden declared he would not be running for re-election, the value of the US dollar slowly declined. Sentiment plummeted as a result of Biden’s move, which increased uncertainty surrounding the impending presidential elections. The dollar was affected by this as well as worries that additional disputes with China may result from a Trump presidency.
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