The pound gained some strength against both the euro and the US dollar yesterday, despite US financial markets being closed for Independence Day celebrations. The pound gained close to 0.45% and 0.3%, against the euro and dollar, respectively.
Investors reported uncertainty about whether the pound would maintain yesterday’s gains amid talks the Bank of England (BoE) is set to raise interest rates higher. This morning, it slipped slightly against the euro but remains 0.43% up on the week.
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Yesterday, prime minister Rishi Sunak faced questions from the parliament liaison committee, which scrutinises the government’s efficiency. The committee questioned recent actions regarding high inflation and the PM confirmed that while inflation is proving more persistent than anticipated, it does not mean that they were wrong.
He continued, “Whether that’s monetary policy, responsible fiscal policy or supply side reform, that’s the right toolkit that you need to deploy bringing inflation down.”
A recent report presented to the high court on Tuesday revealed that UK water companies discharged raw sewage into rivers and seas by way of their storm overflows, over 300,000 times in 2022. This news came around the same time that Thames Water was fined £3.34 million for sewage dumping in another hearing.
The Reserve Bank of Australia kept interest rates unchanged in its July meeting, which remained at 4.1%. However, there were talks of further monetary tightening in the near future as inflation remained at 7.0% in the first quarter of the year.
Later today, a flurry of economic data will come in from S&P Global, who releases services purchasing managers’ indices (PMI) for Spain, France and the UK and composite PMI for the EU.
In the US, the Federal Open Market Committee is due to publish minutes from its June meeting, which should provide insight on the upcoming monetary policy that aims to bring inflation back down to the Federal Reserve’s 2% target.
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