GBP: Unable to push onwards
EUR: Watching US retail sales
USD: What’s getting going
Sterling
Picking through the bones of this morning’s unemployment release there is not too much to get excited about for either sterling bulls or bears. As the furlough scheme winds down and eventually closes we will need to see exactly how easy it is for those furloughed to return to work and at what pay but, for now at least, it’s still too early to tell.
The generalised risk-off atmosphere in markets currently is not sterling’s friend and hence its inability to hold on to the highs that it hit last week.
Inflation data tomorrow morning may help the pound more.
Euro
The euro is also stuck in a fairly tight range at the moment and will be looking towards the US for a hint on progress this afternoon. US retail sales are the main economic driver on the session today and a strong number at 13.30 would be enough to bring EURUSD and the wider single currency lower.
USD
As we get closer to the end of the month and the Jackson Hole economic symposium, dollar and rates bulls are starting to get the yips. Friday’s weak consumer confidence numbers, plus a rise in delta variant cases have started to undermine the view that tapering of stimulus is a foregone conclusion.
Today’s retail sales number will help flesh out the picture further and in concert with a poor consumer confidence number last week could easily cast a shadow over the confidence seen in markets recently.
A poor number at 13.30 and we’ll be looking for additional USD strength through the session.
Elsewhere
Hammer blow for the kiwi dollar overnight as a single covid case in Auckland sent the currency lower by a full per cent ahead of tonight’s RBNZ meeting. We still think the Bank goes ahead with a hike in rates tonight but the crucial thing for ongoing NZD appreciation will be any forward guidance from the meeting as nobody views a rate hike as ‘one and done’.
The RBNZ announce policy at 3am tomorrow morning
Market rates
Today’s Interbank Rates at 08:22 against sterling. Movement vs Friday.
| Euro | €1.172 ↓ |
| US dollar | $1.379 ↓ |
| Australian dollar | $1.893 ↑ |
| South African rand | R20.57 ↑ |
| Japanese yen | ¥150.6 ↓ |
Have a great day.
