Today's headlines: Tragic weekend weakens USD | USD looks soft after dovish Fed talk | GBPEUR highest for two years

Tragic weekend weakens USD

It is almost inconceivable, with today’s sophisticated surveillance techniques, that a gunman could crawl across a rooftop in plain sight and take shots at a presidential candidate. However, that happened over the weekend in Pennsylvania, wounding Donald Trump, killing an innocent attendee and seriously wounding two others. The impact on the families involved must be traumatic. Our hearts go out to them. The impact on the financial markets is that it has unnerved investors, but that hasn’t been reflected in the value of the USD. The GBP/USD rate was testing – but not breaking above- USD 1.30 on Friday. This pair is a tad lower this morning at $1.2970. EUR/USD pushed a little above $1.09 on Friday but is just below that level today. It is worthy of note that there is a lot of market chatter that the bond markets are pricing in a Trump Presidency.?

Slowing Chinese GDP weakens Australasian dollars

Chinese economy growth slowed to an annualised 4.7% in Q2, down from 5.3% in Q1. Retail sales were also slower, at 2.0% on the year, compared to 3.7%, in the year to May. That had an impact on China’s suppliers. We saw the GBP/AUD rate rise above AUD 1.9150 and the GBP/NZD rate spike to NZD 2.13 (interbank) for the first time since September 2023. Although Canada earns less from exports to China, it is still hugely influenced by commodity prices. That has caused the GBP/CAD rate to hit the?highest level we have seen since March 2021. This pair is up at CAD 1.77 in this morning’s interbank market. Other influences on these currencies in the week ahead include the Canadian, UK and NZ consumer price indices. We will also see employment data from the UK and Australia. It is It's going to be busy.

GBP EUR highest for two years

In this morning’s interbank market, the pound is trading at 1.1905 against the euro. This is the continuation of an upward trend that began when the pound changed direction in January 2023. It brings this exchange rate up to the highest level we have seen since July 2022, making the euro very affordable but making life difficult for those who need to purchase sterling. Things that will influence this exchange rate this week include UK employment data and inflation figures and, although the European Central Bank is unlikely to cut their base rate this week, many believe they will start paving the way for a rate cut next month and that ought to further weaken the euro.

Today's Major Economic Releases

02:00 CNY Gross Domestic Product (QoQ)(Q2)?

02:00 CNY Gross Domestic Product (YoY)(Q2)?

02:00 CNY Industrial Production (YoY)(Jun)?

02:00 CNY Retail Sales (YoY)(Jun)?

16:30 USD Fed's Chair Powell speech?

Interbank Exchange Rates