The dollar continued its downward slide on Monday, falling another 0.1% against the pound and nearly 0.5% on the euro. Falling more than 10% since President Donald Trump took office, it marks the worst start of the year for the US currency since 1973.
It was a strong day for the euro, which also climbed more than 0.3% on the pound.
The Office for National Statistics revealed on Monday that, despite having the fastest rate of growth in the G7, disposable income in the UK is falling. At the start of the year, households found themselves 1% worse off, while prices of everyday items also increased.
That squeeze is reflected in this morning’s house price data, which shows a 0.8% decline in June. Likely caused by April’s increase in stamp duty, it is also an indication UK spending power is falling.
As June ended, analysts were able to determine that the dollar has had the worst first half of the year since 1973. Since Trump took office in January, it has tumbled 10.8%, a far from ringing endorsement of his economic policy.
There was some positive news out of the US yesterday, however. Trump’s administration is rumoured to be nearing agreement on trade deals with several countries. These deals may prevent the worst of the economic shocks due to hit when Trump’s tariff pause expires on July 9th.
In Europe, Monday brought news that Germany’s inflation fell to its 2% target. Data due later today is expected to confirm a similar story for the rest of the eurozone. While the UK and US economies continue to show erratic climbs and falls, the EU seems to have got control of inflation – even with all the turmoil of Trump’s trade tariffs.
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