G7

After the sluggish wages data yesterday, the pound was hit again this morning on news UK inflation remained flat in June, raising further doubts over an August rate hike from the Bank of England. But this was good news for the stock markets, with the commodity-heavy FTSE 100 extending its gains after a sizeable rally the day before and despite ongoing weakness in prices of crude oil and metals.

Investors have been left wondering whether today’s sluggish jobs data may have any implications on the Bank of England’s rate decision next month.

The single currency has performed particularly well against the Canadian dollar, which has been undermined by continued uncertainty over NAFTA negotiations and recent volatility in oil prices.

During the gathering of central bankers and finance ministers at the G7 meetings in Japan on Saturday, the US reiterated warnings to its host against intervening to weaken the yen. In the weeks prior to the meetings, Japanese officials had been issuing an intensifying stream of intervention rhetoric attempting to justify Japan’s readiness and willingness to take action in the event of exceptional yen volatility (or perhaps more accurately, yen strengthening). Partly as a result of these public comments and the resulting potential risk of an actual intervention, the yen had been weakening since early May, pushing up the USD/JPY currency pair from its recent long-term lows.