The pound and the euro both rose against the US dollar on the back of lower than expected inflation numbers. Headline inflation in the US sank to 3% in June, the lowest figure since this time last year.
At one point yesterday, GBP/USD rose to its highest level in almost a year. EUR/USD also climbed, reaching its highest since early June. Things were more even between the pound and the euro, although sterling did still rise slightly over the course of Thursday.
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But back to the here and now. Reaction to yesterday’s US inflation data was swift and significant. The US dollar came under selling pressure as markets interpreted the fall in the headline figure to 3%, which was lower than the expected 3.1%, as a sign that the Federal Reserve would be more likely to cut interest rates twice this year.
Joe Biden vowed to ‘complete the job’ as he continued to face calls to drop out of the presidential race. The president gave a defiant press conference, sparring with reporters at the end of the Nato summit. However, a painful gaffe where he confused Volodymyr Zelenskyy with Vladimir Putin hardly proved his mental acuity.
S&P Global’s UK business outlook found that output prices and staff costs are expected to fall to their lowest in three years. Investment activity is expected to increase in the coming year, although more firms are cutting back on their forecasted earnings.
China’s monthly trade surplus swelled to almost $99.1bn in June, well above forecasts of $85.3bn. That came as the export market boomed while weak domestic demand served to dampen imports.
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