Gentium FX | Daily Report - 8th September 2023-BoE Governor Bailey Comments Influence Sterling
GBP: The British Pound experienced a significant drop against the dollar for the second consecutive day yesterday, indicating more negative developments for the UK economy. The decline in Sterling began after the Governor of the Bank of England, Andrew Bailey, expressed his belief that current interest rates are approaching the upper end of the potential rate cycle in Britain. This represents a substantial shift in expectations compared to just a few weeks ago.
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EUR: The Euro has faced some difficulties as economic news from Europe has generally been less optimistic. Notably, the Eurozone's gross domestic product (GDP) only grew by 0.1% in the second quarter compared to the previous three months, with the influential German manufacturing sector encountering significant challenges. Consequently, this has had a dampening effect on the Euro.
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USD: While the U.S. dollar slightly decreased in value this morning, it is still poised for an eighth consecutive week of gains, primarily due to the resilience of the U.S. economy, which has raised questions about the possibility of further Federal Reserve interest rate hikes. Recent data releases have presented a positive outlook for the U.S. economy, with the services sector unexpectedly gaining strength in August and jobless claims reaching their lowest levels since February.
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