The pound is still stronger against the euro this morning following the Prime Minister’s resignation at the end of last week. Several Conservative MPs are now putting their names forward for the leadership race. So far, there are 11 contenders and more could be announced.
Significant data releases are in the calendar this week, including UK GDP figures and US inflation data on Wednesday. US inflation is expected to show an increase in June to 8.8%, whilst core inflation is predicted to fall slightly.
German inflation data will also be released this week, which is predicted to fall slightly. The markets will be keeping a close eye on all of these data releases as the week unfolds.
Bank of England governor, Andrew Bailey, will also be watching the data calendar closely ahead of his speech tomorrow.
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GBP: UK GDP figures this week
The pound strengthened against the euro at the end of last week and is still trading around those levels this morning following the Prime Minister’s resignation. However, it is slightly weaker against the dollar.
Bank of England governor, Andrew Bailey, is due to speak tomorrow ahead of UK GDP figures, which will be released on Wednesday. Monthly GDP for May is expected to come in at 0%, a slightly uplift from April’s figure of -0.3%.
Analysts have warned this morning that the UK’s energy price cap could move above £3,300 per year next January under Ofgem’s new quarterly cap changes.
GBP/USD chart over past year
EUR: Euro suffers ahead of German inflation data
The euro is weaker against both the pound and the dollar this morning, suffering from both sterling and greenback strength.
It’s a fairly busy week for economic data releases, with economic sentiment figures due tomorrow and German inflation data on Wednesday. German inflation is expected to have fallen slightly in June to 7.6% annually and 0.1% month-on-month.
USD: Inflation data expected this week
The dollar is stronger this morning against a basket of currencies due to global growth fears. These have been exacerbated by fears of more lockdowns in China after Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant yesterday.
Despite economic worries, data released on Friday revealed that the US’ unemployment rate remained at 3.6% in June, remaining at its lowest since February 2020.
This week, inflation data will be released for June, expected to show a slight increase to 8.8% annually from 8.6% last month. Core inflation, however, is expected to rise slightly.