GBP
Sterling found a reprieve last week, benefiting from a modestly softer dollar, allowing cable to score its first positive week in four.
This was despite further poor UK economic reports, including inflation surging to new highs since 1982, retail sales remaining subdued, and consumer confidence holding at a record low for a second straight month.
Looking ahead, this week contains little of much interest in GBP traders, with the next significant event not coming until the BoE decision in the first week of August.
EUR
The common currency benefitted from the ECB’s first-rate hike in eleven years, and the softer dollar, last week, climbing north of parity with the greenback, and having its best week since late-Mya.
Nevertheless, Friday’s ‘flash’ PMI data points to a rather grim time ahead, with output contracting for the first time since the covid lockdowns of winter 2021, a trend set to worsen throughout the coming quarters.
This week, the most interesting releases come on Friday, with the July inflation and Q2 GDP figures both set for release.
USD
The greenback rolled over a touch last week, continuing to retreat from the 20-year highs set mid-month, despite global growth concerns rapidly increasing, a factor which would typically be a bullish catalyst for the USD.
Perhaps a solid performance in equity markets, including a brief 3-day winning streak for the S&P 500, helped dollar bears to wrestle control of matters, though the move is unlikely to be the beginning of a new trend.
A relatively hawkish FOMC decision this week, with another 75bps hike expected, should help USD bulls to re-assert control in relatively short order, though all eyes will be on the size of the hike that policymakers signal for September.
World News
US Federal Reserve are set to approve another 75 basis-point interest-rate hike this week and show their intention to move higher in the months ahead. Growth is slowing in response to the Fed’s rate increases, with inflation being persistent at a four-decade high. Many analysts believe it will take a recession and high joblessness to ease inflation.
Just hours after signing a deal to unblock grain exports from Ukraine, Russia attacked a seaport in Odesa spiking wheat prices. The move was originally hailed as a vital step toward alleviating the global food crisis, however the attack from Russia raises question marks. Millions of tons of grain are still stuck in Ukraine after Russia’s invasion blocked its major ports.
Data Releases
| Date | Region | Release | Previous | Consensus |
| Tuesday 26th July | US | CB Consumer Confidence | 98.7 | 96.8 |
| Wednesday 27th July | US | Federal Reserve Rate Decision | 1.75% | 2.50% |
| Thursday 28th July | US | Advance GDP q/q | -1.60% | 0.40% |
| Friday 29th July | EUR | CPI Flash Estimate | 8.60% | 8.70% |
| Friday 29th July | US | Core PCE Price Index m/m | 0.30% | 0.50% |
Indices
| Share Index | Prev. Close | Open |
| FTSE100 | 7276.37 | 7276.37 |
| DAX | 13253.68 | 13183.24 |
| CAC40 | 6216.82 | 6198.83 |