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Market Update
- Posted by currencies in Sterling, UK, Uncategorised
- July 19, 2024
- No Comments
ECB held rates at bay yesterday which did contribute to a slight EUR gain until their press conference. In the press conference we could hear from President Christine Lagarde that a rate cut in September is currently ‘wide-open’ and markets reaction was that we will see the second movement from the European central bank to lowering borrowing costs. There were also mentions of a potential third rate cut in December, that also contributed to balance rates back after some EUR gains.
This morning we saw much worse than anticipated retail sales for the UK. Markets hasn’t moved much on this data, due to that the report suggest that it’s down to very poor weather in June. The conclusion to this is that even if retailers reported poor performances, it’s not down to that household’s disposable income is crushed. If this was the case, GBP would have taken larger losses against other currency peers – adding pressure on BoE to lower their interest rates. As it’s standing, BoE are still quite reserved to lowering borrowing costs that has been the main factor of GBP taken advantages to both the EUR and USD.
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