British Pound starts August with solid gains

GBP

The British Pound started August with solid gains against both the Euro and Dollar but risks decline later this week as the Bank of England faces one of its toughest-ever interest rate decisions as the UK heads toward recession

The Bank of England will deliver its latest interest rate decision on Thursday against a backdrop of soaring prices and multiple warning signs that the UK is heading for a recession this year.

Rates are expected to rise again, by 0.25% or 0.5%, increasing costs for millions of borrowers
That gives the nine members of the Monetary Policy Committee a tougher job than perhaps any time since Gordon Brown made the bank independent of government in 1997.

USD

There are no major data releases today. However, in the US the June JOLTS survey of job openings and labour market turnover will provide further detail on employment trends.

The main monthly report for June that was released a few weeks ago showed employment growth slowing but overall, the message seemed to be that the labour market is still tight.

Meanwhile, US Federal Reserve policymakers at the back end of last week cited the economy is not in recession despite confirmation that GDP fell in the first half of 2022. They also remain concerned that labour market tightness may further fuel wage growth.

EUR

Eurozone unemployment remained stable at 6.6% during the month of June 2022 compared with the previous month, the EU’s statistical office Eurostat announced yesterday.

It has decreased by 1.3% compared to last year’s unemployment level as people go back to work after job losses during the COVID-19 pandemic.

The rates differ per EU country. Unemployment was highest in Spain and Greece at 12.6% and 12.3% respectively. The Czech Republic has the lowest unemployment rate in the EU at 2.4%.

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