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The pound continues to weaken against the euro this morning after a seeing record lows last week. Against the dollar, sterling has also declined. In the early hours of this morning GBP/USD was recorded at 1.14, just less than half a percent lower than last Monday’s rate.
The Tory leadership race between former chancellor of the exchequer Rishi Sunak, and foreign secretary Liz Truss concludes today with the announcement of Britain’s next prime minister at 12:30 this afternoon. First on the list for Britain’s new prime minister will be tackling the UK’s rising energy costs. Analysts are expecting gas prices to soar even higher this week following Russia’s closure of its key Nord stream 1 pipeline on Friday, further tightening the squeeze on eurozone gas supplies.
The euro continues strengthen against the pound this morning but has weakened against the dollar after a choppy week. This follows rising gas supply fears following further obstructions to eurozone gas supplies by Russia. On Friday Russia extended their shutdown of gas supplies to Germany through its Nord stream 1 pipeline, which could further amplify the knock-on effects of the energy crisis this winter
All ears will be on the US Federal Reserve this week, as market watchers anticipate another speech from the Fed’s Vice Chair Lael Brainard. Currently, markets are doubtful towards the Fed’s plans to increase interest rates until inflation is under control.
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GBP: sterling at a low against both currencies
The pound continues to weaken against the euro this morning after a seeing record lows last week. Against the dollar, sterling has also declined. In the early hours of this morning GBP/USD was recorded at 1.14, which is just less than half a percent lower than last Monday’s rate.
The Tory leadership race between former chancellor of the exchequer Rishi Sunak, and foreign secretary Liz Truss concludes today with the announcement of Britain’s next prime minister at 12:30 this afternoon. First on the list for Britain’s new prime minister will be tackling the UK’s rising energy costs. Analysts are expecting gas prices to soar even higher this week following Russia’s closure of its key Nord stream 1 pipeline on Friday, further tightening the squeeze on eurozone gas supplies.
The latest S&P Global/CIPS UK Services PMI data will be announced at 9:30 this morning. Although the last reading edged down gently from 52.6 to 52.5, the UK services sector still performed much better than markets anticipated (with a reading originally forecast at 52). Today, markets are expecting PMI to hold its position and remain at 52.5 for the second consecutive month.
GBP/USD over the past year
EUR: euro stronger against the pound but weaker against the dollar
The euro continues to strengthen against the pound this morning but has weakened against the dollar, after a choppy week. This follows rising gas supply fears following further obstructions to eurozone gas supplies by Russia.
On Friday Russia extended their shutdown of gas supplies to Germany through its Nord stream 1 pipeline, which could further amplify the knock-on effects of the energy crisis this winter. French Finance Minister Bruno Le Maire said “it’s not a surprise” that the Nord stream gas pipeline was shut indefinitely, and that we need to be prepared for a “total halt in gas supplies from Russia.”
Lots of PMI data will be coming out of the eurozone today. As well as euro area S&P Global services PMI, Spain, Italy, France and Germany’s S&P Global Services PMI will all be released today.
USD: Dollar stronger against both currencies
The dollar comes out on top this morning as it continues to find new strength against both currencies.
Today is a quiet day for data releases in the US however, ISM Non-Manufacturing PMI will be released tomorrow. In July, markets witnessed unexpected ISM PMI growth with a reading of 56.7, and this week markets will be expecting those numbers to fall to 55.
All ears on the US Federal Reserve this week, as market watchers anticipate another speech from the Fed’s Vice Chair Lael Brainard. At the moment, markets are still doubtful towards the Fed’s plans to increase interest rates until inflation is under control. Sonal Desai, the chief investment officer for fixed income at Franklin Templeton Cos, said “The Fed lacks credibility,” during Bloomberg Television’s “Wall Street Week” on Friday.
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