Trump Survives Assassination Attempt; Pound at Yearly Highs Against the Euro and Dollar
GBP
GBP/USD has surged and is currently trading at 1.2975 (interbank), hitting a one-year high. GBP/EUR has also rallied and is now at 1.1915 (interbank), marking its highest level since August 2022.
Last week witnessed the Pound rally following reduced expectations of a BoE rate cut in August, bolstered by stronger-than-expected GDP growth of 0.4% in May.
This week commences with the State Opening of Parliament, where the new Labour government will unveil its legislative agenda for the first time in 14 years.
Investor focus will be on the upcoming UK inflation data scheduled for Wednesday. If CPI holds steady at 2% for a second consecutive month, heightened expectations of an August rate cut by the BoE could prompt Sterling to retreat from recent highs.
Additionally, despite the FTSE 100 gaining 0.36% on Friday, futures indicate a weaker start to Monday’s trading with a 0.21% decline to 8,259.0 points.
No significant events are scheduled for today
EUR
EUR/USD has retraced slightly to 1.0895 (interbank).
ECB officials foresee inflation pressures remaining steady throughout the year, reducing prospects for further ECB rate cuts.
ECB President Christine Lagarde reiterated a cautious stance this month, noting, “The robust labour market allows us to gather new information cautiously, though uncertainty persists in the growth outlook.”
The ECB’s key event this week is Thursday’s policy decision, where markets anticipate the Bank to maintain rates after June’s easing, yet speculation remains on potential cuts in September.
The ECB is expected to maintain a data-dependent approach, keeping guidance flexible.
Today’s Events (GMT):
10:00 - Industrial Production (May) – Forecast: -0.9%
USD
The Dollar Index, which gauges the U.S. dollar against a basket of major currencies, remained largely stable at 104.20.
U.S. political unrest unfolded over the weekend when former President Donald Trump was injured in an assassination attempt during a rally in Butler, Pennsylvania on Saturday. One attendee was killed in the incident, and two others sustained critical injuries. Trump was photographed with a wound to his ear and was observed encouraging his supporters to “resist!” while being escorted away.
Trump is scheduled to make an appearance at the 2024 Republican convention later this week, where he is expected to be nominated as the party’s leading candidate for the presidential election.
Analysts suggest that this incident has bolstered his prospects of defeating Joe Biden—an outcome that might favour the dollar, given Trump's intention to implement more protective trade policies.
This week will witness a series of speeches from Federal Reserve policymakers offering further insights into monetary policies.
Today’s Events (GMT):
17:30 - Fed Chair Powell Speaks
21:35 - FOMC Member Daly Speaks
CAD
USD/CAD is currently trading at 1.3656 (interbank), showing little change amid minimal Canadian data releases.
Today, the BoC will release its Business Outlook Survey and Canadian Survey of Consumer Expectations, setting the tone for economic sentiment.
Focus turns to June’s inflation data tomorrow, pivotal for the BoC’s upcoming interest rate decision, following May’s 2.9% annual inflation rate.
Canada will also release May’s manufacturing and wholesale trade data today, with retail trade data due on Friday.
Brent crude has edged up 0.1% to $85.10 a barrel, while West Texas Intermediate (WTI) crude has also risen 0.1% to $84.15 a barrel.
Today’s Events (GMT):
13:30 - Wholesale Sales (May) – Forecast: 2.0%
15:30 - BoC Business Outlook Survey
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