Despite fluctuating around 0.3% yesterday, the pound-to-euro rate remains relatively unchanged from start of play Monday.
Sterling lost 0.25% against the US dollar yesterday, following news that the US housing market index rose another 5 points in June 2023, to 55. This is the highest reading since July 2022 and beat market forecasts of 51. The pound has continued to fall against the US dollar this morning.
Yesterday prime minister, Rishi Sunak ruled out extra help for UK homeowners amid soaring mortgage rates. This comes as figures showed the average two-year fixed-rate loan rose by 6% in June.
Sunak said the government should “stick to the plan” to halve inflation in its attempts to tackle the cost-of-living crisis.
UK inflation figures for May are due early tomorrow morning and economists expect the year-on-year rate to fall from 8.7% to 8.4%.
Later today, economists will receive the latest preliminary figures for US building permits, which are forecast to rise from 1.417m to 1.1425m. Should the data match expectations, it will end the cycle of two consecutive declines.
It was a busy day for Canadian economists yesterday, who had a flurry of data to absorb. Industrial producer prices fell by 1% in May 2023, compared to forecasts of a 0.7% fall. This was the most pronounced decline since August last year and was driven by falling prices for energy and gas products.
The Canadian dollar rose to its strongest rate in nine months against the US dollar as economists digested a hawkish outlook from the Bank of Canada and greenback weakness.
The big data release this week will come on Thursday from the Bank of England (BoE) which is expected to raise UK interest rates by 25 basis points. This would take the rate to 4.75%.
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