Sterling remains relatively unchanged from yesterday’s close against both the euro and dollar in early trading. UK economic growth will “grind to a halt” before briefly falling into negative territory according to a report published this morning by the British Chamber of Commerce (BCC). The business group downgraded its 2022 growth forecast from 3.6% to 3.5%, said inflation would reach 10% in the last quarter, and slashed their investment growth expectations for 2022 from 3.5% to 1.8%. The report follows another bleak warning yesterday from the Organisation for Economic Co-operation and Development, who forecast that the UK’s growth in 2023 will be worse than any other G20 country with the exception of Russia.


The euro has been struggling to make a move in either direction against the dollar as traders await the eagerly anticipated European Central Bank’s policy announcements later today. Depending on the ECB’s tone, the single currency could break out of its recent tight trading range against the greenback. The central bank is widely expected to leave its key interest rates unchanged and conclude its Asset Purchase Programme (APP), which would pave the way for a hike at next month’s meeting. If the policy statement indicates that the majority of policymakers favour a 50-basis point hike at the July meeting, it will provide a boost for the Euro. On the other hand, if some governing members show increasing concerns about the potential negative impact of aggressive policy tightening, it could undermine the euro.


Ahead of the all-important ECB meeting later today, the greenback continued to fluctuate within its recent ranges against its major currency pairings. Treasury secretary Janet Yellen told congress yesterday that the Biden administration could lift some tariffs on Chinese imports, which could help bring down consumer prices, but warned that it would not be the solution to America’s soaring inflation. The weekly initial jobless claims will be the only featured data in the US economic calendar this afternoon.

Economic Calendar

12:45 EUR ECB Interest Rate Decision
12:45 EUR ECB Monetary Policy Statement
13:30 EUR ECB Press Conference
13:30 USD Initial Jobless Claims