Market Report : 11-08-2023

Published: 11/08/2023 By ECAP

The British Pound broke three straight days of losses this morning after data showed the U.K. economy grew more than expected in June, which boosted sterling against the dollar and the euro. The strong showing bolstered bets that the BoE would keep on raising interest rates, given the central bank stressed this month that resilience in the economy was one of the factors that would underpin its judgement.

The Euro has been trading without any clear direction following the release of the European Central Bank’s monthly Economic Bulletin. The data unveiled a highly uncertain outlook for the bloc’s economic growth and inflation. Market participants are showing mixed concerns as a slim majority expect a pause to the rate hike trajectory in September. However, hot inflation also pushes some economists to expect a rate increase by the year-end.

The U.S. Dollar is trading largely unchanged this morning as market participants digest the latest inflation reading, with the U.S. consumer price index growing less than expected in July. While the reading spurred bets that the Fed will keep rates on hold in September, it also saw markets trim their expectations for a rate cut this year, with rates expected to remain at 22-year highs until 2024.