Dollar Falls On Potential Rate Cuts.

The dollar lost considerable ground yesterday and fell to a near seven-week low as the US central bank appeared to suggest they were open to the idea of an interest hike given the current risks associated with growth and trade. The comments were made by Federal Reserve Chairman Jerome Powell which came only a day after another Federal Reserve member James Bullard commented that a rate cut would be “soon.” Markets are now pricing in a 90% chance of this happening before the end of September.

The Conservative leadership battle appears to finally be shrinking as two contenders pulled out of the race on Tuesday. The field has already been criticised of being too large leading to a potential delay in reaching a new leader. A final decision is expected by the week commencing the 22nd July with a recent piece in the Guardian giving Boris Johnson a 48% chance of winning, followed by Michael Gove at 22% and Andrea Leadsom in third with 13%.

During the second day of his visit to the UK, President Trump seemed keen to reiterate the strong bond between the two countries calling the alliance “extraordinary” and the “greatest the world has ever known.” In a press conference with soon to be former PM Theresa May he also promised a “phenomenal” trade deal two to three times what it currently is. This will no doubt be music to the ears of many prominent Brexiteers who have long suggested the potential for greater trade opportunities outside of the EU.

Economic Calendar

08:30GBP Markit Services PMI (May)50.650.4
08:45GBP BoE's Ramsden speech--
09:00EUR Retail Sales (YoY) (Apr)1.5%1.9%
12:15USD ADP Employment Change (May)180K275K
13:45USD Markit PMI Composite (May)50.950.9
13:45USD Markit Services PMI (May)50.950.9
13:45USD Fed's Clarida speech--
14:00USD ISM Non-Manufacturing PMI (May)55.555.5
18:00USD Fed's Beige Book REPORT--

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.