Published: 31/07/2023 By ECApThe British Pound has opened this week’s trading session relatively flat as investors await the BoE’s meeting on Thursday. Market participants are worried about deepening recession fears due to aggressive policy-tightening by the central bank. The BoE is expected to raise interest rates for the 14th time in a row as labour shortages and higher food prices have been major contributors to sticky UK inflation which remains the highest compared to other G7 economies.
The Euro wobbled in early European trade this morning ahead of the release of key eurozone inflation and growth data after ECB President Christine Lagarde hinted at a pause in its tightening cycle as soon as September. Supporting that idea, German retail sales fell 0.8% on the month in June, thus pointing at continued weakness in the most important economy in the eurozone.
The U.S. Dollar has started the new week on a positive note but is still on course to register a monthly decline of roughly 1%, its second straight losing month. This follows last week’s interest rate hike by the Fed, but expectations are growing that this could be the last increase of the central bank’s aggressive year-long tightening cycle.