• Audere Research

Weekly FX Outlook August 9th


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GB Pound


Sterling had an average week.


Movements

GBPUSD opened at 1.3911 but closed lower at 1.3852 (-0.42%).


GBPEUR opened at 1.1715 before closing at 1.1787 (+0.61%).


Movement rationale

Cost of UK manufacturers rose due to resource and staff shortages in July. The Pound strengthened against the Dollar, Euro and Yen following a BoE monetary policy update during which a reduction to its policy interest rate threshold was announced. The BoE warned of a ‘more pronounced’ period of inflation. This saw EURGBP attempts to build momentum however the pair faces tough resistance - 0.85 is expected to act as resistance going forward.


Week ahead

The UK economic data calendar includes the following:


Calendar

Tuesday | BRC Retail Sales Monitor

Tuesday | 10-y Bond Auction

Thursday 7.00am | Preliminary GDP

Thursday 7.00am | Goods Trade Balance

Thursday 7.00am | Manufacturing Production Data

Thursday 7.00am | Industrial Production Data

Thursday 7.00am | Preliminary Business Investment Data


US Dollar


The Dollar experienced a two-week high before succumbing to a multiple-month low last night and thereby experiencing a mixed bias heading into the second week of August.


Movements

EURUSD began the week at 1.1873 and closed at 1.1751 (-1.03%).


GBPUSD opened at 1.3911 and closed low at 1.3852 (-0.42%).


Movement rationale

The Dow rose 100 points thereby closing at a record high on Friday after jobs report indicated strong economic recovery Economic data from Germany and the U.S put the EUR and USD in focus. The latter CCY was fuelled by strong U.S. job growth. Following Friday’s NFP numbers, today’s stats are unlikely to have a material impact on the Dollar or the broader markets. USD has rallied following the July US nonfarm payrolls report. This follows elevated US Treasury yields and a jump in Fed rate hike odds.

Week ahead

The US economic calendar including the following:


Calendar

Monday 15:00pm | Atlanta FED President speech

Monday 17:00pm | Richmond Fed President speech (Jul)

Wednesday | July US inflation report (CPI)

Thursday | Weekly jobless claims figures

Friday | US Import Prices (Jul)


Euro


Movements

EURUSD began the week at 1.1873 and, closed at 1.1751 (-1.03%).


GBPEUR opened at 1.1715 and closed at 1.1787 (+0.61%).


Movement rationale

EURGBP is back on track and has finally managed to break below 0.85. Lagarde remains adamant on maintaining a flexible monetary policy until the economy shows significant improvement. The ECB is determined to maintain its current stance. This suggests, at least from a Euro perspective, that EURUSD will be relatively stable in the week ahead.


Week ahead

The Eurozone economic data calendar includes the following:


Calendar

Monday 7:00am | German Trade Balance

Tuesday 10:00am | ZEW Economic Sentiment

Wednesday 10:00am | German 10-y Bond Auction

Thursday 9:00am | Italian Trade Balance

Friday 7:45:00am | French Final CPI m/m

Friday 10:00am | Trade Balance


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