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Sterling gains a little, but not against the Dollar

July Core CPI for food and energy came in less impressive 0.3% slightly higher than the 0.2% expected but fuelling arguments for interest rate hikes to control inflation. Weekly Jobless claims remained high at 450K, slightly greater than the 440K forecasted. The Dollar also strengthened through major fall in commodities and making gains in the US share market.

The Euro GDP came in at -0.2% in the second of three quarters. The worst performance since the Euro was launched. This could diminish any chances of a rate hike in the near future. The euro did receive a little boost as the German Q2 GDP was better than expected at -0.5% vs. -0.8% forecast.

The Sterling made a slight recovery during the European session after the big falls seen yesterday but not against the Dollar which was at a 22 month low. This was also mainly due to BoE's outlook on UK economy which was gloomy.