Last week saw the USD weaken after better than expected inflation data reduced the likelihood of large rate hikes. Rates currently stand between 3.75% & 4%, and were initially expected to rise above 5%.
The news saw the dollar fall across the board, and GBPUSD rose to 1.1830, the highest rate since mid August and EURUSD reached 1.0350, the highest level since mid July.
Thursday this week will see Chancellor Jeremy Hunt set out the economic plan to help the UK fight recession, with tax hikes for the highest bracket earners looking likely, as well as Government spending cuts.
This week Rishi Sunak will set out a global economic plan at the G20 summit, and it will be the first time that the Prime Minister will face anyone from Vladimir Putin’s administration. With many world leaders present, including Joe Biden, Emmanuel Macron from France and China’s Xi Jinping, tensions could be high as they face Russian foreign minister Sergei Lavrov.
In the US midterms. The White House, meanwhile, made its strongest indication yet that President Joe Biden will run for re-election. The race for the US House of Representatives remains uncalled. Republicans are still favoured to win the lower chamber of Congress which would severely hamper President Joe Biden's plans but their likely majority is shrinking as votes continue to be counted.
The eurozone and most EU countries will head to an economic recession in the last quarter of 2022, according to the European Commission's autumn economic forecast. "The economic situation has deteriorated markedly and we are heading into two quarters of contraction," said EU economy commissioner Paolo Gentiloni at a press conference.
GBPUSD resides at 1.1778
GBPEUR resides at 1.1455
EURUSD resides at 1.0281
