Weekly Round-Up & The Week Ahead

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

DAILY ANALYSIS

USD

Last week we saw the Dollar trade mildly amid some key releases from the Fed, with the US’ PPI being released significantly lower at 2.8% compared to analysts initially predicted figure of an uptick to 3.5%, signifying a cooling period for producer inflation, a positive sign for the Greenback. However, the Nonfarm Payroll Benchmark Revision announced there were 911k fewer jobs than initially calculated, with these mixed announcements leaving the market questioning how strong the current US economy really is.

The Dollar begins this week on a quieter note, with the market anticipating Wednesday’s Interest rate decision from the Fed, a pivotal release for the US economy; growing speculation is that Powell will yield to Trumps sustained political pressure to cut interest rates, with analysts suggesting that the Fed could be pushed into cutting rates prematurely.

All attention turns to Wednesdays key releases, with the market tapping into the Feds Monetary Policy Statement following the Interest Rate Decision, with the market dissecting the tone for any insight as to whether we can expect further rate cuts later this year.

EUR

The Euro concluded last week on a busy note, with the ECB announcing its Monetary Policy statement, keeping it at its current 2%, however, the ECB's President Lagarde soon presented a cautious tone, with analysts interpreting this as Dovish Leaning, fuelling the market to price in future rate cuts in the coming months.

Looking ahead we see a quiet week for the Euro, with only a few speeches from the ECB’s President Lagarde, with hopes there will be some insight to launch the Euro into higher levels this upcoming week

EUR/USD ended the week trading around the 1.1730 level, hitting a strong weekly high of 1.1760, however gains were capped as the Eurozone’s data came out at relatively neutral levels, providing little to no insight to investors.

GBP

Coming off a stagnant period for the Pound last week, we see plenty of key economic data releases this coming week with the Claimant Count anticipated to increase significantly from -6.2k to 20.3k, portraying the lack of strength within the current UK economy. Considering this, all eyes turn to the CPI release this Wednesday morning, with analysts predicting a small increase from 3.8% to 3.9%, a minor increase considering the negativity surrounding Sterling, yet, swings in this figure could possibly alter the forecast for the Pound in the coming weeks – a significant change compared to last week’s sentiment.

GBP/USD trades around the 1.3582 mark at the open this morning, with traders hoping that the key UK data announcements this week will act as a catalyst towards the value of Sterling.


Daily Rates

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