Dear Reader,

Today's overview of economic news and market action: 

• Some volatility for the dollar last week
• It was stronger for much of week, aided in part by US data
• However, Fed Chair Powell’s dovish speech saw it weaken on Friday
• EUR/USD opens this morning above $1.17
• GBP/USD is up in $1.35 territory
• Today’s macro diary features the German Ifo survey (Aug) and US new home sales (Jul)

All rates quoted are indicative market rates.

Manufacturing PMI stayed firmly in expansion mode at 53.2 in July, The services PMI eased further in July to 50.9, Core retail sales rose by 1.0% in the second quarter, Housing commencements 12 month running total back below 41k in June.

The July ECB Governing Council meeting saw the central bank leave interest rates on hold. The deposit and refi rates were maintained at 2.00% and 2.15%, respectively. This was the first ECB meeting of 2025 where the central bank refrained from lowering rates. However, this outcome was very much in line with market expectations.