Among the majors, the British Pound held up the best against the US dollar thanks to continued optimism about further interest rate hikes and stronger economic data.
CBI industrial orders accelerated in the month of June, indicating that the strength of the British pound is not holding back overall demand. This of course supports the potential for 6 percent interest rates by the end of the year which explains why the British pound has outperformed the Euro for the last 4 trading days. Bank of England Governor King also confirmed the central bank?s intentions to tackle inflation aggressively. He indicated that the MPC is determined to bring inflation back to target. As we all know, the MPC?s primary tool to achieve that is the lending rate. Although the GBP/USD is stalling, another stab at 2.0 is very likely. There is no economic data due for release tomorrow.