Published: 07/07/2023 By ECAP
Sterling continues to rally against its peers as the UK current account deficit has improved markedly over the course of the past year and now stands at just 1.7% of GDP. This follows the renewed inflow of foreign capital, an outcome driven by increased UK saving rates, allowing the pound to remain supported.The Euro failed to make any substantial moves yesterday as German industrial production fell 0.2% on the month in May. In fact, the eurozone’s largest economy is struggling to recover from its recession earlier this year, with weak global demand weighing on the country’s manufacturing sector – thus, weighing on the bloc’s single currency.
The US Dollar held its ground following the releases of significant US employment data in the holiday-shortened week. Looking forward, global markets will be keeping a close eye on the all-important US Nonfarm Payrolls report due later today, which will likely lead to a recalibration of the Fed’s rate hike bets in the second half of this year.