GBP: The British Pound suffered a setback at the end of last week and may find it difficult to bounce back before the release on Wednesday of a crucial batch of UK inflation data for June. The BoE will base its decision on Wednesday’s data over whether and how much to increase the Bank Rate from 5%. The market has already raised its forecasts for borrowing prices to rise later this year, so this week’s data may provide more of a negative risk for the pound than anything else.

EUR: The euro strengthened on Friday as traders preferred the safer single currency to its riskier peers due to a cautious market environment. Additionally, better than expected Eurozone trade figures and the Euro’s inverse relationship with a weak US Dollar helped the common currency of the group. Future risk appetite may drive the Euro since there are no notable Eurozone data to report today.

USD: In early European trade this morning, the dollar remained steady as markets continued to speculate about the future of American interest rates. In light of the statistics released on Friday, which indicated that U.S. consumer confidence remained strong through June, fears have grown that the current trend may keep inflation sticky and the Federal Reserve’s hawkish stance. However, significantly lower-than-anticipated U.S. inflation figures caused markets to wonder how much longer the Fed could raise interest rates.

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