Dear Reader,

Today's overview of economic news and market action:

• The dollar was generally firmer for much of last week 
• Supported by risk averse mood/safe haven demand
• However, Friday’s weaker than expected payrolls saw it lose some ground 
• FX action to start the week yesterday was fairly limited 
• EUR/USD opens this morning near $1.10 
• EUR/GBP is trading in the lower half of 86-86.5p
• This week’s data highlights are US CPI and UK GDP

Still Coming Up Trumps

The US economy continues to strongly outperform Europe, as it confounds fears that it could enter recession this year

ECB raises rates again, leaves options open about further hike

As had been well signalled, the July meeting of the ECB’s Governing Council saw the central bank raise rates by a further 25bps, pushing the key deposit rate up to 3.75%

Fed hikes by 25bps, keeps its options open

As widely expected, the Fed hiked US rates by 25bps at the conclusion of its policy meeting yesterday, bringing the target range for the funds rate up to 5.25-5.50%.