All attention today will be on The European Central Banks interest rate decision later this afternoon as The Euro hovers around a one-week high against The Dollar. Further strikes overnight in the Middle East have seen energy prices jump further, applying more price pressures to economies globally. Although The European Central Bank are set to keep rates unchanged, it is expected that the central bank keeps the door open for another rate hike in September.
The European Central Bank had last raised rates in June, and due to what was seen over the last few weeks as more favourable data for wages, economic activity and inflation expectations, it was thought that the wait for another interest rate hike could be prolonged. However, with Oil prices back above $95 per barrel due to the continued conflict in The Middle East, it is looking increasingly likely that the need for another interest rate hike will come sooner rather later. This makes the press conference after the meeting all the more important, as any clues or signals for the next rate hike could see The Euro gain more momentum.
Moving into the latter part of the day, we have Canada’s Retail Sales figures for May being released. It is expected to show a 1% increase from April’s release, with the main contributor coming from an uplift in Fuel sales, but mainly from the increased energy price element.
Elsewhere in The UK, Prime Minister Andy Burnham has also announced 20% business reductions from April 2027 for UK Hospitality businesses in a move which may not have much effect on the markets right now but could essentially pave the way for some much-needed breathing room within the hospitality sector. Moving forward this could allow for prices to drop and therefore encourage more economic activity.
GBP/EUR 1.1693 GBP/USD 1.3357 GBP/AED 4.9079
GBP/AUD 1.9087 GBP/CHF 1.0881 GBP/CAD 1.8800
GBP/NZD 2.3045 EUR/USD 1.1405 GBP/ZAR 21.9544