The been a notable dip in the US dollar in recent trade with the greenback seeing some selling pressure after reports which suggest that President Trump is seeking a weaker currency. The move has boosted the GBP/USD to its highest level in almost 2 weeks and back above the $1.28 handle.
Not thrilled at higher rates
Donald Trump has been a major driver of the financial markets since his election victory sent shockwaves around the world and once more he has caused a notable reaction in the past 24 hours, with some quite extraordinary comments regarding the Fed and the US dollar. Speaking to Reuters, Trump declared himself “not thrilled” by Fed chairman Jerome Powell’s decision to raise rates while repeating his view that China and the EU are manipulating the currencies lower.
The timing of the remarks appears far from coincidental with the USD on a trade-weighted basis hitting its highest level in over a year just last week.
Furthermore, with Fed chair Powell’s hotly anticipated Jackson Hole speech just days away he is clearly looking to impart some influence on the policy message that will be delivered. While there are several seats coming up for nominations on the rate-setting committee there isn’t really too much that Trump can do to directly impact monetary policy, and at present these comments amount to little more than empty rhetoric.
Government surplus in July hits 18-year high
According to figures from the ONS, the UK government posted its biggest July surplus since 2000 in what will come a nice boost for the chancellor ahead of the Autumn budget.
Stronger income tax receipts accounted for much of the improvement with taxes on income and wealth 6.4% higher than last July. The data doesn’t appear to be a one-off either, rather a continuation of a strong recent downtrend with borrowing since April currently at £12.8B - the lowest year-to-date figures since 2002. The £2B more collected by the Treasury in revenue compared to that spent was well above the £1.1B expected by a poll of economists by Thomson Reuters and the £1B seen in the same month last year.