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Market Update

• Posted by currencies in Sterling, UK, Uncategorised
• August 7, 2024
• No Comments

Despite some buoyant UK data releases yesterday, in the construction surveys and more importantly British Retail Sales last month, it has done little to help The Pound as this morning we’ve seen further losses against both EUR & USD. Sterling has now dipped below 1.27 for the first time in a month, and there seems to be a tentative attitude towards Sterling currently as fears increase with the prospect of the violence in the Middle East escalating. Iran pledged at the beginning of the week to retaliate to Israel’s apparent assassination of the Hamas Chief, and with more countries becoming involved in the conflict between Israel and Palestine, the likelihood of an all out war is constantly growing which is leading to traders to flock towards the more safe-haven regarded currencies.

On top of this, the aftermath of the stock markets reaction to The U.S Labour market has increased speculation that The Bank of England will cut their rates twice more before the end of the year which would be a lot more aggressive than the likes of the Reserve Bank of Australia.

Moving into tomorrow we have a speech by one of the Federal Reserve members and no doubt the market will be keeping a look out for any further comments on a potential U.S recession and/or a committed path to interest rate cuts as the markets have now started to price in 125 basis points worth of cuts by the central bank before the end of the year. Again, all down to the aftermath of the underwhelming U.S jobs report last Friday.