Daily Update – 25th July 2019
The common currency neared the year low against its American rival, partially respecting the dominant bearish trend and in part due to discouraging EU data, reviving concerns about economic growth in the Union and lifting odds for steeper measures from the ECB. The central bank will announce its latest decision on monetary policy this Thursday. Growth of German business activity slowed in July as the country’s manufacturers recorded their worst monthly performance. The GBP/USD pair has reached an intraday high of 1.2521 to settle later around 1.2480, up for the day. The Sterling’s advance had little to do with enthusiasm about the currency, but rather with some intraday dollar’s weakness at the beginning of the London session. Still, and despite the greenback remains the strongest, the pair holds on to gains ahead of the Asian opening. As expected, Boris Johnson became the new UK PM. In his first speech, and among other things, Johnson said that the kingdom would come out of the EU on October 31, “no ifs or buts. “He also said that chances of a hard-Brexit are “remote.” In the meantime, several Ministers left, including Philip Hammond and Jeremy Hunt, leaving room for Boris Johnson to form his own cabinet. This Thursday, the UK will release the CBI Distributive Trades Survey - Realized for July. The ECB is expected to maintain rates unchanged, by over these last couple of week, speculation mounted on additional stimulus measures being announced by policymakers, as the economic growth slowdown gives no signs of bottoming. Such speculation has kept the shared currency under pressure these last few days, which means that some dovishness from ECB’s head, Draghi, has been already priced in. The US will release later in the day June Durable Goods Orders, seen increasing in June by 0.7%, after falling 1.3% in the previous month.Yesterday's Focus
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