The dollar has continued to gain strength this week as the chance of a full 1% increase in US interest rates on 29 July looks more likely in the face of 9.1% inflation, the highest in 40 years. This week the dollar hit parity with the euro although it has since been pared back very slightly.
Sterling also recovered marginally against the dollar yesterday after hitting its lowest for over two years at lunchtime.
Producer prices were revealed to have jumped by 1.1% in the month of June. Most of that appears to down to fuel prices rising by 18.5% and feeding into food inflation.
Today there will be two interesting tests of consumer confidence in a time of high inflation and potential recession, with retail sales for June, which are expected to recover from last month’s 0.3% drop. There is also the Michigan Consumer Sentiment reading for July.
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