GBP
We are down to the final two candidates in the Conservative leadership contest following yesterday’s Fifth round of voting by Tory MPS. Rishi Sunak maintained his record of coming first in the poll, with 137 MPs backing him.
Penny Mordaunt had been the second-placed candidate for the previous four votes. But she fell at the final hurdle as MPs rallied behind Liz Truss, who received 113 votes, just eight more than Mordaunt.
The winner of the leadership race will be announced on 5 September, with Boris Johnson in charge until then.
USD
The latest weekly jobless claims will provide a timely insight into the state of the US labour market ahead of next week’s Federal Reserve monetary policy update.
The Fed remains concerned that a tight labour market could further fuel wage growth. The June monthly NFP report showed little sign of those pressures easing.
However, since then, the weekly jobless reports have moved upwards. They are still low by historic standards, but the recent turnaround is nevertheless tentative evidence that the jobs market may be softening.
EUR
Today, all eyes will be on the European Central Bank which is expected to raise interest rates for the first time since 2011.
The ECB has signalled its intention to raise rates today and at forthcoming meetings. A hike of 25bp is expected. However, in recent days speculation has increased that the ECB may consider a larger move of 50bps.
The market will be paying close attention to any update to the ECB’s forward guidance on rates. The event poses some key event risks for the euro.
If you or your company are impacted by currency risk please reach out to speak to one of our experts, we can assist with decision making during this difficult time to help you protect your profits.