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GBP: Welfare bill reversal raises tax hike chances – ING

The UK government scrapped a benefits cut bill that was meant to save £5bn following a revolt by Labour backbenchers. Aside from the potential implications for the stability of PM Starmer’s party leadership, the probability of autumn tax hikes has probably increased further, ING’s FX analyst Francesco Pesole notes.

EUR/GBP remains underpinned by a bullish bias

"The gilt market did not react negatively to the news from the Commons, at least partly thanks to Bank of England Governor Andrew Bailey hinting at a potentially slowing quantitative tightening to give some relief to back-end liquidity. That may have helped shield sterling, too."

"There are no major UK data releases today, though BoE dove Alan Taylor will appear alongside the ECB’s Philip Lane in a Sintra panel. EUR/GBP remains underpinned by a bullish bias, with the welfare reform reversal doing little to alter that outlook. Incoming UK data over the coming weeks will determine whether any push above 0.8600 proves sustainable."

USD/JPY jumps above 144.00 as US Dollar gains ahead of US ADP Employment data

The USD/JPY pair gains sharply to near 144.30 during the European trading session on Wednesday. The asset strengthens as the US Dollar advances ahead of the United States (US) ADP Employment data for June, which will be published at 12:15 GMT.
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Japan’s Akazawa: Any agreement that would hurt our national interests should not be made

Japan's top trade negotiator Ryosei Akazawa said on Wednesday that “any agreement that would hurt our national interests for the sake of timing should not be made.”
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