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The pound starts this week 1.22% higher against the US dollar
It’s been a rocky time for the pound since last Thursday’s surprise interest rate decision from the Bank of England, which was a larger hike than expected. Against the euro and US dollar, the pound has lost close to 0.5% and close to 0.7%, respectively since this time last week. Saying that, the pound-to-euro rate is still close to 1.6% higher than this time last month.
Friday was a tough day for the euro, which approached its most significant one-day decline since mid-March against the US dollar. This was largely due to a slowdown in German private sector growth and a contraction in French business activity, which we heard on Friday.
US stocks fell on Friday. The Dow Jones lost nearly 250 points and the S&P 500 and Nasdaq declined 0.8% and 1% respectively.
This morning, economists will receive the latest figures for Germany’s business climate from the Ifo, which are expected to fall to 91.1 in June, from 91.7 in May.
This week’s spotlight in the US is on Bank Stress results, including US new home sales, durable good orders, and personal income.
Canada’s inflation rate is due on Tuesday, which is expected to fall from 4.4% in April to 3.6% in May.
The rest of the week holds various European inflation rates, including Italy on Wednesday, Spain on Thursday, France and figures for the Euro area on Friday.
Following the Federal Reserve’s decision to keep interest rates unchanged in the policymakers’ June meeting, there are several speeches from Fed chair Jerome Powell this week. Investors will be listening for any direction on future rate hikes.
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GBP – Quiet week for UK
It’s a quiet week for UK data, but investors are still digesting last week’s 50 basis point rate hike from the Bank of England.
GBP/USD: the past year
EUR – Private sector contractions
On Friday last week, economists digested figures from the HCBO France Composite PMI which dropped to 47.3 in June, from 51.2 in May.
It was a similar story for the German composite PMI, which dropped to 50.8 in June, down from 53.9 in May. These figures signalled a sharp slowdown in service sector business activity.
USD – Stock futures edge higher
US stock futures edged higher this morning as we begin the final week in June. Future contracts tied to the three major indexes were all up by at least 0.2%.
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