Monday proved to be a strong day for the dollar, as the US currency climbed 0.4% on both the pound and euro. The gains were likely driven by investors looking for a safe haven currency while the results of President Trump’s meetings with Vladimir Putin and Volodymyr Zelenskyy were unclear.
While trailing the dollar, the pound was marginally ahead of the euro at Monday’s close. Though this gain is so slender it is unlikely to be tied to any one news story out of the UK.
Rachel Reeves is apparently exploring a new tax on the sale of homes worth more than £500,000 and overhauling council tax with a new local tax scheme.
The current council tax system is based on valuations of properties from the 1990s, so any changes to council tax could see a dramatic shift in how much residents pay, particularly in parts of London that have seen significant growth in house prices in the past 30 years.
Later this week inflation rate data, retail sales and manufacturing data will reveal if the UK economy is responding to this year’s Bank of England interest rate cuts, or if the Bank will need change its pace of change.
Over in the US, while European leaders descended on the US to show their support for Ukraine, the dollar climbed 0.4%. Likely a sign of how unsure the market is about the outcome of the recent diplomatic activity surrounding Russia and Ukraine.
The euro dragged behind the dollar and pound, with no major data releases or news to allow it to gather pace against its rivals. It marks the start of another week where it sees losses against the pound.
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