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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