Get ready for a volatile week.
Last week, the UK’s interest rate expectations fell from 6.25% to 5.8%, resulting in a 1.5% drop in GBPUSD and decreased consumer confidence. This week, central bank decisions from the Fed, ECB, and Bank of Japan may impact the sterling’s volatility. On August 3rd, the Bank of England will announce its rate decision, causing uncertainty on whether rates will be hiked by 0.5%, 0.25%, or paused.
Eurozone CPI is stable at 5.5%. ECB’s Knot hints at a possible rate increase beyond July. Bloomberg predicts a 90% chance of a July hike and a 64% probability of an increase in September. Investors watching for Lagarde’s inflation control efforts. Is ECB nearing the end of the hiking cycle?
The US dollar made gains last week, with GBPUSD dropping 2 cents and USDPY rising 2%. The Federal Reserve is expected to hike rates by 0.25% this Wednesday, but concerns have been raised about the market reaction. US Personal Consumption Expenditure data at the end of the week will reveal inflation trends.
Watch central bank meetings and economic reports closely. They can affect currency and market sentiment. Expect fluctuations as traders analyze recent data and central bank decisions.
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