The US dollar strengthened against the pound and the euro on Monday, fuelled both by hopes that the president would adopt a softer position on trade and the release of Israeli hostages in Gaza. Sterling and the euro each lost a little ground to the US dollar, while the pound just shaded things over the euro in quieter European trading.
We just heard that joblessness in the United Kingdom ticked up to 4.8% in August, the highest level since June 2021. Sterling fell steeply against its rivals as the news hit and must now navigate a perilous GDP report on Thursday.
Stock markets had a happier start to the week, interpreting the president’s latest comments as a sign that he would not impose such onerous tariffs on China as previously feared. Writing on Truth Social, Trump said he did not wish to hurt China, comments that boded well for some form of extension of the existing trade agreement.
Perhaps President Trump was in a more diplomatic mood after being snubbed by the Nobel Committee. Whatever his reasons, the president joined regional leaders in Israel to hail a “historic dawn of a new Middle East”. Western leaders including Keir Starmer and Emmanuel Macron have now joined Trump for a peace summit on Egypt’s Red Sea.
Macron called for stability at home while he was away on foreign duties. Yesterday, opposition parties in French parliament threatened to call a vote of no confidence in the president and his government, cobbled together another time over the weekend.
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