In Europe, the pound rose 0.22% to $1.2854, its first day of gains after seven straight sessions of losses, its longest such streak since March 2020.
The euro gained 0.12% to $1.1076, after slumping to a two-week low of $1.1059 earlier in the session, on the back of a survey on Monday which showed euro zone business activity shrank much more than expected in July
That caused traders to trim expectations of future rate hikes by the European Central Bank later in the year. Anything other than a 25-basis-point increase at Thursday’s meeting would come as a major surprise.
The Federal Reserve also meets this week and is expected to raise rates by 25 bps, with a majority of economists polled by Reuters expecting that to mark the last increase of the central bank‘s current tightening cycle.
“While the Fed meeting (in July) is likely to be uncontroversial in terms of the decision on interest rates, the Fed’s statement and the press conference will be extremely relevant for markets,” said Guillermo Felices, global investment strategist at PGIM Fixed Income.
