ECB hikes by 50bps

GBP

British retail sales edged down in June as drivers cut back on record-priced fuel, with consumers reducing shopping less than expected, data showed, though the trend remained weak as households struggled with surging inflation.

UK retail sales fell 0.1% month-on-month in June, which is stronger than the -0.3% reading the market was looking for and an improvement from the -0.8% recorded in May.

The figures mean sales were down 5.8% in the year to June, coming in softer than the -5.3% the market was anticipating.

USD

US dollar languished near its lowest level since July 6 amid diminishing odds for a more aggressive rate hike by the Federal Reserve later this month.

Several FOMC members signalled last week that they will likely stick to a 75 bps rate increase at the upcoming policy meeting on July 26-27.

EUR

Christine Lagarde brought the era of negative European interest rates to an end with the biggest rise in more than two decades on Thursday, in a move that failed to calm market panic over a looming crisis in Italy.

The central bank raised rates by more than anticipated, opting for a 50bps increase, bringing an end to the negative interest rates regime in the Eurozone.

The euro initially climbed following the announcement but dropped again after Ms Lagarde was criticised for providing little detail on future rate hikes. Doubts also grew over the new bond-buying programme announced by the bank (ECB).

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