Sterling enters the day over half a per cent stronger than the euro compared to this time last Thursday and ahead of the European Central Bank’s (ECB’s) big interest rate decision at 1:15pm today. The ECB is expected to hike rates by 25 basis points (bps) to 4%, in its ongoing fight to tame high inflation. Against the US dollar, the pound is stronger on a weekly and monthly footing.
Anticipation for the ECB and US Federal Reserve’s interest rate decisions spread through markets yesterday. In the eurozone, European equities rose late in the afternoon, with Germany’s DAX hitting a new all-time closing high of 16,311.
Meanwhile, the benchmark Stoxx 600 hit a three-week high of 465.
The French stock, CAC 40 was another to hit a three-week high, rising by around 0.5%. Despite this, the mood for many investors yesterday was one of caution ahead of the two major Central Bank decisions.
After a wave of strikes leaving lasting effects on the UK’s economy earlier this year, data released by the Office for National Statistics yesterday revealed things took a much brighter turn in April. Read on for yesterday’s GDP results.
On the data front, US producer prices (PPI) for final demand fell 0.3% month-over-month in May, following a 0.2% rise in April. This also exceeded market expectations of a 0.1% drop.
The Canadian dollar soared to its strongest level in seven months against the US dollar yesterday, following the discrepancy between the Bank of Canada’s monetary policy versus that of the Federal Reserve.
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