Weekly Round-Up & The Week Ahead

Weekly round-up and a look at the week ahead for EUR, GBP, and USD.

DAILY ANALYSIS

USD

Friday afternoon saw the US Dollar give back much of last weeks' gains in response to Fed Chair Jerome Powell's speech at the Jackson Hole Summit after dovish comments signaled that the Fed will now more or less cut rates at next month's meeting. In his speech he highlighted worsening conditions in the labour market and announced a new policy framework of flexible inflation targeting, triggering a USD selloff.

Looking ahead, it appears that the Fed's decision making will be a straight shoot out between inflation concerns versus deteriorating labour market conditions. With that in mind, Friday will be a key day for inflation data with the Fed's historically preferred measurement Core PCE Price Index due for release.

EUR

Yet again, the EUR is a major beneficiary of the USD weakness as we saw EUR move from 1.1580 to well above the 1.17 mark on Friday afternoon. We may need to see a break of the 1.1830 level before the key 1.20 mark comes into radar. The euro also moved higher against the British pound on Friday, with EURGBP breaking above .8660 (GBPEUR below 1.1547).

Later this morning we have the release of the German IFO Survey. The headline IFO Business Climate Index is expected to stay unchanged at 88.6 this month. With EURUSD consolidating its brief pullback from Friday's highs, an unexpected pick up in the German business morale could lift the Euro, reviving the EUR/USD uptrend.

GBP

Today being a public holiday in the UK, we expect a slow start for the pound this week. Looking back on Friday, despite falling again versus the euro, it did post some gains versus the US Dollar in response to Powell's speech, moving back above the 1.3500 mark.

1.35 now appears to be a key level for GBPUSD with moves from there likely to track the general market consensus towards the US Dollar.

Daily Rates

If you need a live exchange rate or quote, give us a call, email us, or request a call-back.

If you have not already registered with us the quote will be indicative.