Market Report : 06.07.2023

Published: 06/07/2023 By ECAP

Sterling was largely unchanged against its peers yesterday, as the debate continued on how far the BoE needs to go to bring inflation under control. As the BoE faces an uphill challenge to curb inflation, the central bank may be forced to turn more aggressive, pushing the economy into recession and limiting sterling gains.

The Euro seems to be consolidating its recent moves as medium-term consumer inflation expectations in the eurozone continued to ease in May, with the 12-month expectation gauge declining from 4.1% to 3.9%. Looking forward, analysts await the release of today’s Eurozone Retail sales for clearer market directions.

The Dollar held its recent gains as the minutes of the Fed’s June meeting showed that policymakers supported more rate hikes in the coming months, citing stubborn inflation and an overheated labour market. Focus now moves onto key Non-farm Payrolls data, due tomorrow, for more cues on the Fed.