Market Update 25th July – 29th July

Where you will be able to keep up to date with all the latest changes in the currency market

GBP

As Liz truss and rishi sunak battle for the job as prime minister we have seen some sterling weakness against both the euro and dollar. Anytime there is any uncertainty withing the government this will typically cause the currency to weaken. last week we had inflation figures come out and they were higher than expected which has added to recession fears in the UK. This week we will be keeping a close eye on any polls coming out which may help determine who will be Boris Johnson’s successor.

EUR

Last week we have seen the EUR drop to lows we haven’t seen since the first week of the month. This could have been caused by Russia cutting off gas supplies to Europe. We have GDP figures coming out this Friday which is they come out higher than expected this will show that the economy is growing and could strengthen the euro. Yet if the figures come out lower than expected we could potentially see this weaken the euro.

USD

We have seen a slight bit of USD recovery as we head into the final week of the month. Continued conflict within Ukraine has caused some dollar strength as expected. Whenever there is any form of world crisis people invest in the dollar as it is seen as a safe haven currency which is what tends to cause the dollar to strengthen. On Wednesday we have an interest rate decision where if the rates are hiked then we could expect to see further dollar strength as a rate hike would typically encourage people to save instead of borrowing from the bank. As the war within the Ukraine continues we could expect to see more USD strength yet if there is an end to the war in the near future witch Is unlikely then we could see investors looking away from the dollar and into other currencies.