Published date: 22 July 2024

GBPEUR

Sterling gained compared to the euro, bolstered by an inflation rate marginally above predictions, particularly due to persistent high inflation in services, which further diminished the likelihood of a rate reduction by the Bank of England in August. However, key upside chart technical levels and overbought conditions capped gains and weak retail sales data took the edge off sterling euphoria.

GBPUSD

Sterling continued its ascendency, supported by inflation data that marginally exceeded forecasts, further diminishing the probability of a rate cut by the Bank of England in August. The general goodwill toward sterling continues, especially as US economic data is less robust, and markets increasingly expect a rate cut from the Fed in September.

EURUSD

The euro retraced slightly last week, absorbing a benign ECB meeting, in which no interest
rate adjustment was seen, whilst Lagarde re-emphasized the central bank is not committed
to a pre-determined policy path and the September meeting is “wide open”.