GBP
The Bank of England’s Monetary Policy Committee is expected to announce another interest rate rise before releasing its latest inflation and economic growth forecasts.
The Pound has firmed against both the Euro and U.S. Dollar through the latter part of July and early August and the currency’s big test comes with the size of the hike announced and the shape of those forecasts.
Rates are expected to rise again, by 0.25% or 0.5%, increasing costs for millions of borrowers.
USD
Turning to the day ahead, the main release of note will be the latest US non-manufacturing ISM.
The consensus is for the index to move lower to 53.5 in July from 55.3 previously. In the Eurozone, retail sales are forecast to stagnate in June, as inflation continues to weigh on disposable incomes.
EUR
The euro was on the defensive as investors pared back their rate hike expectations in the Euro-area once again.
The deposit rate is now seen as rising to near 1% by year-end and remaining in and around that level throughout 2023.
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