Last week was a bit of a non-event across the board with hardly any economic data released and a day less with liquidity due to the US Independence Day. It meant further consolidation for Sterling though which extends its rally and continues to provide great value against most currencies.
This week brings two tests. First up is tomorrow's jobs report which is expected to show the workforce rebounded further in May. To counter-balance that, wages are expected to grow, but at a much slower pace than the previous month. Thursday's GDP release is the risk event in our opinion. May's growth will be hampered by the King's coronation and with GDP barely in growth as it is, a second-quarter contraction is likely. This will read negatively and potentially create a slight problem for the Pound this week.
EUR
The Euro-Zone has nothing really of note again this week and so will be moved by events elsewhere. The single currency gained 0.5% on the USD last week after US jobs slowed to the slowest pace since December 2021. A similar gain could be made this week across the board with the other majors facing some headwinds.
USD
The US releases its latest inflation rate figure this week and the consensus is to see a sizeable drop once again. The more important core inflation number however looks to have remained robust though and therefore will allow the Fed to raise rates by 25bp this month. That's the overwhelming majority vote from economists, but anything can happen on these days with volatile data so let's see..
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