The outlook for the pound is poor ahead of a key BoE interest rate decision this week. The dollar isn’t faring much better following a disappointing week of data in the US. Tariffs continue to create a sense of unease and things are getting crude in the OPEC states. Read on to find out more about the latest developments impacting markets and currencies today.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1558 |
| gbp eur | 1.1487 |
| gbp usd | 1.3277 |
Rates correct as of 10:15am on Monday 4 August but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Sterling shivers as markets brace for BoE cut
The pound came under pressure last week ahead of the Bank of England’s latest rate call. Inflation hit a 17-month high – well above the Bank’s May forecast – just as economic growth shows signs of cooling. A widely expected rate cut on Thursday would mark the fifth in a row, dragging the base rate to 4%. With labour market softness emerging and households already £5bn out of pocket from lower savings returns, sentiment around GBP remains fragile.
US jobs miss leaves dollar on shaky ground
The Federal Reserve on the other hand decided not to cut rates last week, Powell again opting to wait and see how the tariff saga plays out, much to the chagrin of Trump, who launched fresh attacks on the Fed chair. But a weak non-farm payrolls report dealt the dollar a blow, with just 73,000 new jobs added in July – well below the 106,000 needed to keep pace with population growth. Revised figures and unemployment edging higher to 4.2% added to market jitters.
[CNN]
OPEC+ lifts production as global surplus looms
In other news, the Organization of the Petroleum Exporting Countries agreed to raise oil output by 547,000 barrels a day in September – its latest move to claw back market share after years of cuts. The group cited strong economic fundamentals and low stockpiles, though analysts warn that rising supply and slowing demand, particularly from China, could leave a 2 million bpd surplus by Q4. This comes as Trump issued tariff threats against India over Russian oil purchases, adding more uncertainty to global flows.
Looking forward
- Monday: Switzerland releases CPI.
- Tuesday: South Korea publishes CPI; US publishes trade balance and ISM services PMI
- Thursday: Bank of England Interest Rate decision. China and Eurozone Balance of Trade.
- Friday: Canada unemployment data.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- Tracking GBP/EUR volatility
- What will impact of new tariffs be?
- Business outlook for a good H2
The contents of this article do not constitute financial advice and are provided for general information purposes only.