Market Report

All eyes on BOE interest rate decision today.The predictions are 'no change', with an increase unlikely, today any way. A further raise to 6% is predicted however, by the end of the calender year.

BOE and ECB both announce rate decisions today. The European Central Bank may leave its benchmark interest rate at a six-year high today and signal a September increase.

American jobless claims could hurt the Dollar today, if as negative as expected.

LR

With the summer finally upon us there is also some sunshine for the Pound, Euro and Australian Dollar.

A mixed batch of news from the UK housing sector did little to change expectations that the Bank of England will leave interest rates on hold at 5.75 percent this week, but will raise them later this year. Data from the Bank of England showed British mortgage lending grew at its fastest pace in three months in June and approvals for new home loans held steady although they had been expected to fall.

My feeling is that the Euro and Sterling still have a room to strenghthen again after investors get back their appetite for risk and central bank rates increase further before the year is out. The Australian Dollar could also be a big mover on the back of investors confidence.

LR

Good Morning,

After a not so wet weekend the currency markets have literally stayed static since COB Friday. This was after a sharp drop in Sterling Vs the US Dollar and a six-week low against the Japanese Yen in a broad sell-off of high-yielding currencies, as investors cut some of their more stretched foreign exchange positions.

Weaker than expected data this week from the Nationwide building society and British Bankers Association may also weigh on the pound, suggesting the housing sector might be feeling the pinch of five Bank of England rate rises since last August and calling into question how much higher rates will go? Analysts said the current environment made the pound ripe for profit-taking having recently reached 26-year peaks.

So it could be a tricky week ahead for Sterling as our Summer finally arrives!

LR

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