All eyes locked in on the Jackson Hole Symposium and Powell’s upcoming speech

Daily Currency Update

UK inflation just pulled a fast one, climbing to 3.8% in July - which is the highest in 18 months. This was driven largely by surging transport and services costs. The CPI rise nudged up from 3.6% in June.

GBP responded with a nudge upward gaining about 0.1% against both the dollar and the euro.

The inflation gap is currently flaring wildly, UK inflation now stands 1.8 percentage points higher than the eurozone’s stable 2%, marking the steepest divergence in nearly two years. This underscores the BoE’s growing dilemma - do we hold firm, or risk undermining credibility with cuts too soon?

Market verdict is that we will not rate cut until at least spring 2026. Some are betting on a 50/50 chance before year-end.

In Europe, we are seeing the euro sit quietly with no significant intraday moves as markets stay cautious.

Lagarde’s warning echoes - The EU economy may hold its ground now, but future growth could buckle under tariff pressures.

Over in the US the dollar is looking soggy but stable at a DXY of 98.30, as concerns mount over political pressure on the Fed’s independence. Trump’s calls for Fed Governor Lisa Cook to resign have sparked tension, though they’ve yet to move markets much.

All eyes locked in on the Jackson Hole Symposium and Powell’s upcoming speech as the gambling table’s centrepiece, with markets hoping to receive clarity on rate cuts. With speculation rising, around an 82% chance of a September cut is now priced in.