The Dollar trades on the back foot over bets of a less aggressive rate hike trajectory.
August 1, 2022
GBP/USD 1.2218 GBP/EUR 1.1915 EUR/USD 1.0254 USD/CAD 1.2784 EUR/CHF 0.9743 EUR/SEK 10.3989 EUR/NOK 9.9179 EUR/DKK 7.4445 USD/ILS 3.3808 AUD/USD 0.7030 NZD/USD 0.6325 USD/SGD 1.3774 USD/JPY 132.31 USD/CNH 6.7621 USD/INR 79.0300 EUR/ILS 3.4662 GBP/ILS 4.1279 USD/ZAR 16.4936
GBPUSD trades close to a monthly high around 1.2200, as traders await this weeks Bank of England rate decision, where the central Bank are widely expected to hike rates by 50bps, the fastest pace since 1995.
Postal votes will be sent to 175,000 conservative party members today to elect Rishi Sunak or Liz Truss for the next leader and PM. Consensus is that Liz Truss is currently ahead in the race, after winning support of a number of party heavyweights. The winner will not be announced until September 5th.EUR
German retail sales disappointed this morning, falling 8.8% YoY against expectations of -8%, the biggest decline since 1994. The monthly figure for June also unexpectedly fell, with higher food prices in particular restricting consumers purchasing power.
GDP figures on Friday generally beat expectations. German growth declined as they face ongoing energy price pressure, however Italian, French and Spanish figures grew sizably, with tourism over the summer holidays the main contributor. Eurozone GDP rose 0.7% QoQ.USD
The dollar continues to trade on the back foot over bets of a less aggressive rate hike trajectory from the Fed. The DXY is down 0.2% intraday, after losing 0.8% last week.
Federal Reserve member Neel Kashkari said that the central bank are committed to reaching their inflation goal of 2% in the long term. Global stocks rallied with the S&P and Nasdaq leading the way, gaining 1.4% and 1.88% respectively.ASIA/PACIFIC
The yen is on its longest winning streak in 6 months, gaining 0.9% against the Dollar as reduced expectations for Fed hikes shifts risk focus.
Oil prices fell following a surprise contraction in Chinas manufacturing PMI, adding concerns to a global slowdown. Asian stocks climbed, led the way by the Nikkei gaining 0.7% and Australia’s ASX 200 up 0.7%.ILSAmid broad Dollar weakness, USDILS lost 2% last week to trade just above the 3.3800 level at time of writing.
The shekel gained 5.1% against a basket of the worlds major currencies last month, outperforming all of them against the Dollar. EURILS trades at the lowest level since October 2000.Data & EventsUS - Manufacturing PMI
UK/Europe - Manufacturing PMI
Europe - Unemployment Rate
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