Gilt Yields
GBP
The British Pound weakened as concerns over rising UK government borrowing costs weighed on confidence. With little UK economic news available, the Pound lacked support. Upcoming UK services data could help the pound recover if it shows stronger activity in August. However, higher borrowing costs and expectations of tighter interest rates remain key risks, potentially limiting the pound’s strength in the near term.
EUR
The Euro gained some support as investors favoured safer assets amid a cautious market mood. However, its progress was limited by a lack of major economic data and concerns over rising geopolitical tensions. Upcoming economic figures could influence sentiment, while stronger price pressures may increase expectations of higher interest rates, potentially providing further support for the euro in the near term.
USD
The US Dollar strengthened as investors sought safer assets during widespread market uncertainty. Expectations of a possible Federal Reserve interest rate increase also supported demand. Upcoming US services data could provide further support if it shows stronger activity. However, markets are also awaiting the latest jobs figures, which could have a significant impact on expectations for US interest rates and the dollar’s direction.
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