Market Report : 16.07.2024

Published: 16/07/2024 By ECAP

The British Pound has been consolidating its recent gains as investors increasingly view the United Kingdom's financial markets as a preferable investment destination over both European and US markets, which are grappling with political uncertainties. In fact, the Labour Party's victory has assured stable fiscal policies and streamlined ministerial appointments. Ultimately, this positive sentiment has bolstered the British Pound.

The Euro found support from bullish expectations surrounding the European Central Bank. In fact, the ECB is expected to maintain the main refinancing rate at 4.25% during its upcoming July meeting on Thursday. However, analysts anticipate two additional rate cuts later this year, likely in September and December.

The U.S. Dollar extended an overnight rebound from three-month lows as speculation over a Donald Trump presidency helped the dollar rise past increased bets on interest rate cuts. In fact, a second term for Trump is expected to be positive for the dollar, given that he is widely expected to enact more protectionist trade policies that could result in higher inflation. Such a scenario could keep interest rates relatively higher in the long-term.

Data supplied by GC Partners