On Friday, the British Pound steadily increased in value due to renewed expectations for rate cuts and an appetite for risk across the board in the market. Its advantage also stemmed from the UK General Election’s obvious result, which marks the beginning of a period of more stable politics in the country. Indeed, the financial markets of a country benefit when a political party wins an outright majority.

The outcome of the French election did not provide a fatal blow to the Euro, and the single currency may yet continue its recent upswing as we begin the new week. The results of the French elections really indicated that the communist coalition had the most legislative seats. Furthermore, the far-right party of Marine Le Pen placed third, and the party of President Emmanuel Macron came in second.

With rising anticipation of more interest rate reduction, the US dollar continued its sharp declines versus a basket of currencies, stabilising close to a one-month low. Indeed, only one week ago, markets were pricing in a 64.1% chance of a rate decrease in September; now, they are pricing in a 70.7% possibility. This week’s highlights include the Federal Reserve Chair Jerome Powell’s two-day testimony and important consumer price index inflation statistics.

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