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Tuesday saw the pound, euro and dollar close the market virtually unchanged, with only 0.02% difference between them. Of those, the euro was ostensibly ahead, but there was almost nothing in it. Perhaps it was because of the universally bleak economic news from each region yesterday.
The S&P growth report showed that the UK economy has slowed to a four-month low. Surveyed companies put the blame on political and economic uncertainty. This was compounded by slowed manufacturing, with fewer orders coming in for domestic and export markets.
The news didn’t get better for the UK as the day went on, with the OECD stating that the UK is likely to have the fastest rising inflation in the G7 this year.
Meanwhile US manufacturing is facing the largest build-up of unsold goods ever, as domestic and export orders drop.
A German manufacturing survey similarly showed declining output, suggesting the impact of US President Donald Trump’s tariffs are biting across the continent. It had been forecast to show slight growth, so the downturn is particularly unwelcome.
Later this morning, the German Business Climate Index will be updated, and that will give a more detailed picture of the EU’s growth prospects in the coming months.
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GBP: Higher inflation on the horizon
The pound was very slightly behind the euro and the dollar, though we’re talking less than 0.1%. However, the news out of the UK was dismal, with the OECD predicting inflation rises and S&P revealing growth declines.
GBP/USD past year
EUR: Trump tariffs biting
While the euro was marginally ahead of the pound on Tuesday and only fractionally behind the dollar, there was gloomy economic news. A survey of German manufacturing showed a dip when analysts predicted a rise, a downturn inflicted by Trump’s tariffs.
EUR/USD past year
USD: Best of a bad bunch
While the dollar was up on both the pound and euro, the gain was very slight, less than 0.1% in both cases. However, behind that was the news that US factories are seeing unsold stock pile up at the fastest rate since records began.
USD/GBP past year
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