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Inflationary pressures continue to mount as markets look for UK rate hikes

Inflationary pressures continue to mount as markets look for UK rate hikes

The main currency pairs were subdued for much of yesterday and overnight with most of the majors opening this morning with only modest changes from 24 hours earlier. However, the first hours of trading this morning have shown downward pressure on sterling.

As we get going today, EUR/GBP has edged back over the 85p mark, GBP/USD is changing hands down into the $1.35 mark and EUR/USD is just above the midpoint of the $1.15-1.16 trading band. 

Looking ahead to the rest of today, the data diary is busier – already this morning a raft of labour market data from the UK for August has been published. This included the unemployment rate falling as anticipated to 4.5%. Later, we get the German ZEW survey as well as US job openings and small business optimism, these releases could offer some risk to both USD and EUR.

 

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