Published: 20/07/2023 By ECAPSterling reached its best level against the Dollar since April 2022 earlier this week but was hobbled when yesterday’s inflation figures fell further than expected. Nevertheless, when softening price pressures are combined with historically high wage growth in the labour market, the result is a form of stimulus for the UK economy, which has gotten some analysts growing more optimistic about the outlook for sterling.
The Euro is headed for its longest winning streak against the dollar since 2004 as investors bet the Fed is close to ending its campaign of interest-rate hikes. In fact, the common currency extended its gains into a ninth day on Tuesday, reaching the strongest level since February 2022, before retracing part of the move. Ultimately, the pair has jumped 4% in less than two weeks.
The US Dollar edged higher during yesterday’s session as a fading appetite for risk boosted the safe-haven currency’s appeal. However, disappointing US retail sales data seems to have capped the greenback’s recovery, after sales growth unexpectedly slowed in June. Looking forward, US economic data is in short supply today, so the market mood could drive USD movement.