GBP: Nothing going on
EUR: ECB minutes unlikely to move things
USD: Powell speaks tomorrow
Sterling
Let’s be clear, there is nothing going on in sterling markets at the moment. With little data on the UK calendar today we do not expect that to change in the next 24hrs. GBPUSD has managed to move higher, as a result of the weakness in the USD, but GBPEUR remains really stubborn around the 1.168/1.170 mark.
Sterling will follow movements elsewhere for the rest of the week.
Euro
The European Central Bank minutes due today may have already had their sting drawn out of it by a conversation yesterday with ECB Chief Economist Philip Lane. Much like in the US and the UK, conversations have begun on when it is best to reduce the stimulus that the central bank has been providing to the European economy with some in markets believing that the time has come for that discussion.
Lane thinks otherwise and is a pretty good barometer of the median idea of what is going on within the central bank.
As a result, we expect the single currency to also remain quiet until tomorrow’s Fed announcement.
USD
As we get within 36hrs of the Jackson Hole speech from Fed Chair Jerome Powell, markets are starting to get a little more cautious after a week of selling the USD. Dollar buyers may be looking at the last few days of dollar weakness ahead of the Fed speech tomorrow which will likely be a mix of cautious optimism and expectation management.
US GDP and initial jobless claims figures are also due today but will largely be glossed over if they’re in spitting distance of the consensus numbers.
Elsewhere
South Korea became the first Asian country to raise interest rates overnight as the Bank of Korea decided that they think it prudent to quell financial risks ahead of supporting the economy through further outbreaks of Covid-19. This will prove to be an interesting test case ahead of other countries normalising their policy too.
Market rates
Today’s Interbank Rates at 08:58 against sterling. Movement vs Friday.
| Euro | €1.168 ↑ |
| US dollar | $1.375 ↑ |
| Australian dollar | $1.893 ↓ |
| South African rand | R20.55 ↓ |
| Japanese yen | ¥151.5 ↑ |
Have a great day.
