Thursday 25th July
The pound (GBP) fell on Thursday as expectations for a Bank of England (BoE) rate cut grew stronger. Despite last week’s surprisingly strong UK inflation numbers and hawkish comments from BoE Chief Economist Huw Pill, most economists surveyed by Reuters still predict a rate cut next week.
The euro (EUR) gained strength, with investors seemingly ignoring Germany’s disappointing IFO business climate index. The index saw its third straight decline in July, reaching its lowest point since February, as concerns over Germany’s economic outlook grew.
The US dollar (USD) rose broadly after the latest US GDP figures showed the economy expanded faster than expected in the second quarter. However, the gains were limited by a sharp drop in US durable goods orders reported for last month.
Wednesday 24th July
The pound (GBP) rose broadly on Wednesday, boosted by the latest UK PMIs. July’s preliminary data showed accelerated activity in both manufacturing and services, with manufacturing experiencing its strongest growth in two years due to a post-election demand surge.
The euro (EUR) lost its early gains yesterday after disappointing PMI results from the Eurozone. Investors were disappointed as the figures indicated the bloc’s private sector narrowly avoided stalling in July.
Initially firming amid a risk-off market mood, the US dollar (USD) retreated yesterday following the latest US PMIs. While the US service sector grew faster than expected, the manufacturing sector’s unexpected contraction unnerved USD investors.
Tuesday 23rd July
The pound (GBP) showed mixed performance on Tuesday due to the absence of new British economic data, leaving it without clear direction. Despite this, a more optimistic outlook for the UK, supported by signs of economic recovery and renewed political stability, kept Sterling steady against weaker rivals.
The euro (EUR) declined as markets increased their expectations of another European Central Bank (ECB) rate cut in September. Even an afternoon boost in Eurozone consumer confidence couldn’t lift the euro, as the rise in morale was partly driven by hopes of continued ECB monetary policy easing.
The US dollar (USD) climbed against most of its competitors, driven by a gloomy market mood that increased demand for the safe-haven currency. This risk aversion was fueled by concerns over China’s economic outlook and political uncertainty in the US following Joe Biden’s withdrawal from the 2024 presidential race.
Monday 22nd July
The pound (GBP) traded sideways yesterday due to the absence of UK economic data. Concerns about UK government finances weighed on GBP, especially after reports that Chancellor Rachel Reeves is contemplating a 5.5% public sector pay rise, potentially costing £10bn.
The euro (EUR) remained subdued as some investors anticipated a September rate cut from the European Central Bank (ECB). The lack of significant Eurozone economic data also kept the currency’s movement limited.
The US dollar (USD) was quiet amid expectations that the Federal Reserve might start unwinding its monetary policy in September. Political uncertainty in the US, following Joe Biden’s withdrawal from the 2024 presidential race, further dampened USD demand.
Friday 19th July
The pound (GBP) weakened against stronger currencies on Friday after a sharper-than-expected drop in UK retail sales growth for the previous month. UK sales fell by 1.2% in June, but economists attributed the decline mainly to pre-election anxiety and unusually wet weather, which helped limit GBP’s losses.
The euro (EUR) strengthened against riskier currencies on Friday, with a cautious market mood prompting investors to prefer the safer single currency. EUR also recovered some of the ground lost following the European Central Bank’s (ECB) interest rate decision on Thursday, as markets seemed to have overreacted to ECB President Christine Lagarde’s restrained comments.
The US dollar (USD) continued its recovery at the end of the week after Federal Reserve policymaker Mary Daly warned that it would be risky to lower interest rates too soon. Additionally, rising US Treasury bond yields and market risk aversion bolstered the safe-haven ‘greenback’.
Thursday 18th July
The pound (GBP) fell back yesterday from its recent multi-month highs after the latest UK labour market report. As anticipated, British wage growth slowed in the three months to May, renewing speculation about a potential Bank of England (BoE) interest rate cut in August.
The euro (EUR) weakened following the European Central Bank’s (ECB) interest rate decision. Though the bank kept rates steady, ECB President Christine Lagarde’s statement that a rate cut in September was ‘wide open’ put pressure on the currency.
The US dollar (USD) strengthened against some weaker currencies yesterday, despite initial jobless claims rising more than expected last week. The initial boost for USD seemed to stem from it being oversold, with a significant increase in US Treasury bond yields later in the day helping the dollar gain further.
Wednesday 17th July
The pound (GBP) gained strength yesterday following the release of the latest UK consumer price index, which led markets to scale back expectations of an August interest rate cut by the Bank of England (BoE). Headline inflation remained at 2%, rather than falling to the anticipated 1.9%, and services inflation unexpectedly rose. This shift reduced speculation about a BoE rate cut next month, providing support for Sterling.
The euro (EUR) edged up yesterday, even as final Eurozone inflation figures confirmed a cooling in price pressures for June. The euro’s rise appeared to be driven by its strong negative correlation with the US dollar (USD), which faced selling pressure.
The US dollar (USD) weakened yesterday as speculation about a September rate cut by the Federal Reserve continued to weigh on its exchange rates. However, the dollar managed to recover some of its losses in the afternoon after US industrial production data surpassed forecasts. June’s output exceeded expectations, and May’s figures were revised higher.
Tuesday 16th July
The pound (GBP) showed mixed movements yesterday due to a lack of UK economic data, leaving the currency directionless. Investors were cautious and avoided making significant moves ahead of the release of this morning’s consumer price index.
The euro (EUR) struggled to gain traction after Germany’s ZEW economic sentiment index revealed a sharper-than-expected drop this month. The decline in confidence in the Eurozone’s largest economy hit its lowest point in four months, leaving EUR exchange rates largely flat.
The US dollar (USD) strengthened yesterday following retail sales data that exceeded expectations. Although sales growth for June was as anticipated, the upward revision of May’s figure from 0.1% to 0.3% helped lift the dollar.
Monday 15th July
The pound (GBP) remained steady yesterday due to a lack of UK economic data, keeping the currency within a narrow range. Sterling was unable to build on its recent strong performance after Bank of England (BoE) policymaker Swati Dhingra suggested that it is time to begin reducing interest rates.
The euro (EUR) was sluggish on Monday as weak Eurozone data limited support for the currency. Industrial production in the region fell by 0.6% in May, which was better than the anticipated 1% drop. Growth in energy and non-durable consumer goods production helped mitigate more significant losses.
The US dollar (USD) experienced volatility at the start of the week following the attempted assassination of US Presidential candidate Donald Trump. The dollar weakened as markets factored in a potential interest rate cut by the Federal Reserve in September. However, a speech by Fed Chair Jerome Powell in the evening helped the currency recover some of its losses.
Friday 12th July
The pound (GBP) continued its upward trend on Friday, concluding a robust week of gains fueled by optimism. Increased hopes for political stability in the UK, improved GDP figures, and recent hawkish remarks from Bank of England officials heightened demand for the currency.
The euro (EUR) displayed mixed performance towards the end of the week, lacking clear direction due to a scarcity of significant Eurozone data. Although a weaker US dollar (USD) provided some support to the euro, its safe-haven status struggled against more volatile currencies amid a positive market sentiment.
On Friday, the US dollar experienced declines as investors anticipated a potential interest rate cut from the Federal Reserve, following Thursday’s softer inflation report. Selling pressure intensified after the US consumer sentiment index unexpectedly dropped for the fourth consecutive month in July, indicating a decrease in consumer inflation expectations.
Thursday 11th July
The pound (GBP) gained strength yesterday following the release of UK GDP data that surpassed expectations. The British economy recorded a growth of 0.4% in May, outpacing forecasts of 0.2%, which contributed to the pound’s rise.
Pressure mounted on the euro (EUR) yesterday as Germany’s final consumer price index for June indicated a slowdown in inflation for the Eurozone’s largest economy. Despite this, the euro benefited from its strong negative correlation with the declining US dollar (USD), preventing more significant losses.
The US dollar fell sharply yesterday after June’s CPI data revealed a greater-than-anticipated easing in inflation. Both headline and core inflation rates dropped more than expected, with the headline figure reaching a one-year low. This development heightened speculation about a potential interest rate cut from the Federal Reserve in September, with market odds jumping from below 70% to nearly 85%.
Wednesday 10th July
The pound (GBP) surged yesterday after comments from Bank of England Chief Economist Huw Pill. Speaking at Asia House in London, Pill stated that it remained an “open question” whether the BoE was prepared to cut interest rates, highlighting concerns over the “uncomfortable strength” in wage growth. Following his remarks, the likelihood of a rate cut in August dropped from 62% to 50%, leading to a boost for Sterling.
The euro (EUR) displayed mixed performance yesterday, hindered by a lack of data and ongoing political uncertainty in France. Despite this, the euro found some support due to its strong negative correlation with a weakening US dollar (USD).
The US dollar weakened yesterday as investors adopted a cautious stance ahead of the upcoming consumer price index report. Anticipation of a potential easing in inflation left the “greenback” struggling to gain traction.
Tuesday 9th July
The pound (GBP) experienced limited movement yesterday as enthusiasm surrounding the recent UK election and Labour’s significant victory began to fade. In the afternoon, Sterling slipped without any obvious reason for the shift, possibly due to profit-taking actions by traders.
The euro (EUR) remained subdued yesterday, affected by a lack of data from the Eurozone and ongoing political uncertainty in France. The recent election in France resulted in a hung parliament, raising fears that a political impasse could create challenges for the Eurozone’s second-largest economy.
The US dollar (USD) gained ground yesterday, supported by a slight increase in US Treasury yields. Afternoon remarks from Federal Reserve Chair Jerome Powell also bolstered the dollar, as he cautioned against premature interest rate cuts, emphasising the need for more evidence of easing inflation.
Monday 8th July
Investors responded positively to the new UK government’s initial actions, as the Labour Party moved forward with its growth-boosting agenda. Additionally, hawkish remarks from outgoing Bank of England (BoE) policymaker Jonathan Haskel bolstered the pound (GBP). Haskel expressed a preference to maintain interest rates at the bank’s upcoming August meeting instead of opting for a cut.
The euro (EUR) experienced volatility on Monday following the second round of the French parliamentary election, where the far-right National Rally (RN) party finished third, trailing behind a centrist coalition and a left-wing alliance. Investors were relieved that the RN did not gain power, given its “unsustainable” fiscal policies. However, the uncertainty stemming from a hung parliament limited the euro’s upward potential.
The US dollar (USD) remained subdued at the beginning of the week, lingering near recent lows due to a lack of economic data from the US. A shaky market sentiment did not provide the safe-haven currency with the usual support, while expectations of a potential rate cut from the Federal Reserve in September kept the dollar under pressure.
Friday 5th July -The pound (GBP) saw moderate gains on Friday after the Labour Party secured a decisive victory in the UK general election. Investors responded positively to the results, but since a Labour win was largely anticipated, Sterling’s movement was limited.
The euro (EUR) ended last week on a mixed note, as declining German industrial production and weaker Eurozone retail sales weighed on the currency. However, EUR found some support due to its strong negative correlation with a weakening US dollar (USD).
The US dollar hit multi-week lows on Friday, pressured by falling US Treasury yields. A mixed non-farm payrolls report also affected USD; while June’s job numbers surpassed expectations, a significant downward revision to May’s results dampened any potential gains.
Thursday 4th July
The pound (GBP) remained steady yesterday as polling stations opened across the UK for the general election. Investors were cautious, refraining from making significant changes to their positions in the pound, which kept Sterling subdued.
The euro (EUR) showed resilience despite an unexpected drop in German factory orders in May. Support came from the European Central Bank’s (ECB) latest meeting minutes, revealing that not all policymakers supported last month’s interest rate cut. However, concerns about economic growth limited the euro’s gains.
The US dollar (USD) weakened slightly as the Independence Day holiday led to quiet trading conditions in the US. Following Wednesday’s weaker economic data, USD trended lower, though overall movement was limited.
Wednesday 3rd July
The pound (GBP) gained traction yesterday after the UK’s final services PMI for June was revised upwards. The index posted a score of 52.1, improving on the preliminary estimate of 51.2. This better-than-expected performance in the UK services sector provided support for Sterling.
The euro (EUR) experienced mixed movements as lacklustre data caused some uncertainty. The Eurozone’s final services PMI was adjusted slightly higher, indicating a smaller slowdown in activity than initially expected. However, cooling producer price inflation in the Eurozone raised the possibility of further European Central Bank (ECB) interest rate cuts later in the year.
The US dollar (USD) declined on Wednesday after the ISM services PMI unexpectedly indicated a contraction in June. This was further impacted by the latest ADP employment report, which revealed a slowdown in job creation. The release of the Federal Reserve meeting minutes in the evening resulted in minimal market reaction.
Tuesday 2nd July
The pound (GBP) strengthened against several currencies yesterday, despite the absence of new UK economic data. Improved market sentiment supported the risk-sensitive pound.
The euro (EUR) came under pressure after the Eurozone’s preliminary consumer price index for June showed a decrease in headline inflation, dropping from 2.6% in May to 2.5%. This fueled speculation about additional interest rate cuts from the European Central Bank (ECB) later this year.
The US dollar (USD) weakened following comments from Federal Reserve Chair Jerome Powell, who noted that recent data points to a ‘disinflationary path’ for the US. However, an unexpected rise in US job openings helped cushion the dollar, easing some concerns about the strength of the labour market.
Monday 1st July
The pound (GBP) showed mixed performance yesterday following the release of the UK’s final manufacturing PMI for June, which was revised down, indicating an unexpected decline in factory activity. Despite this, the PMI report included some positive indicators suggesting ongoing recovery in the sector.
The euro (EUR) reached multi-week highs after the first round of France’s legislative election. Investors were relieved that the far-right National Rally (RN) party did not perform as strongly as some polls had anticipated, reducing the likelihood of the RN gaining an outright majority and pushing forward its populist fiscal policies.
The US dollar (USD) started the week on a weaker note due to the lingering effects of Friday’s cooling US inflation data. However, the dollar managed to recover in the afternoon as a worsening market mood boosted the appeal of the safe-haven currency.
Currency Ranges for the month:
GBP/USD: Low: High:
GBP/EUR: Low: High:
EUR/USD: Low: High: