The pound soared to a one-year high against the US dollar yesterday after data showed the US labour market was weaker than initially expected. The pound is currently 2.5% higher than this time last year.
Against the euro, the pound added 0.25% on Wednesday despite a lack of supporting UK data.
Yesterday, investors received the minutes from the Federal Reserve’s July meeting which indicated that if economic data continued to match expectations, it would probably be appropriate to ease monetary policy.
Following this information, Western investors poured money back into gold stocks, which soared to record highs as the likelihood of an upcoming Fed rate cut increased.
In the UK, unions are pushing for public sector “pay restoration” as a challenge to labour. At the conference next month, the Trades Union Congress is expected to press the new government for above-inflation pay rises.
Speaking of the government, new figures revealed that UK borrowing costs were pushed to more than double their level in the same period a year ago due to strong spending on public services and welfare. This adds fuel to the fire burning between Labour and Conservative parties over the health of public finances.
PwC has told clients that it expects Chinese authorities to present it with a six-month business ban that could come into effect as soon as September due to its audit of collapsed property developer Evergrande. The ban could come with a large fine and would be the harshest action by Chinese regulators against a Big Four firm.
Today, flash purchasing managers’ indices will be released for the UK, US, euro area, Germany and France.
The European Central Bank will release minutes from its last monetary policy meeting. In the US, presidential candidate Harris is set to close the final night of the Democratic National Convention in Chicago with a speech accepting her party’s nomination.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 7898 0541 to get started
