Carney Gives Pound Some Respite

GBP

The pound showed some resolve on Thursday as Mark Carney told law makers British banks hold enough capital to cope with a no-deal Brexit and a global trade war simultaneously, the Bank of England said on Thursday, although a disruptive Brexit would still cause major turbulence for financial markets and the economy. Carney said that “ In a disorderly Brexit, a range of UK asset prices would be expected to adjust sharply, tightening financial conditions for UK households and businesses.”

USD

U.S. underlying consumer prices increased by the most in nearly 18 ,months in June amid solid gains in the costs of a range of goods and services, but will probably not change expectations the Federal Reserve will cut interest rates this month. Figures released on Thursday shoe the consumer price index excluding the volatile food and energy components rising 0.3% last month. The largest increase since January 2018 and followed four straight monthly gains of 0.1%. The core CPI was boosted by strong increases in the prices for apparel, used cars and trucks, as well as household furnishings.

EUR

Yesterday the he International Monetary Fund released their annual report, where it also backed the European Central Bank’s (ECB) plans for fresh stimulus. Stating that the euro zone economy faces rising risks stemming from trade tensions, Brexit and Italy. The report also said the euro remained slightly undervalued despite having appreciated last year. The IMF also predicted inflation to remain far off the ECB’s close-to-2% target at least until 2022, and forecast a 1.3% rate this year, in line with ECB estimates.

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