Category Archives: FX News

Yesterday’s big data highlight was US durable goods orders for July. Headline orders decreased more than expected, by 5.2%, compared to a -4.0% drop predicted.

However, the headline figure can fluctuate from month to month. Meanwhile, ‘core’ orders increased by 0.1%, which was in line with expectations.

The dollar was firmer yesterday, and this has persisted in overnight trading ahead of Fed Chair Powell’s remarks at the Jackson Hole Economic Symposium today. In other currency news, sterling has been under pressure, coinciding with a further decrease in UK yields/interest rates.

Given that the Fed is increasingly heavily reliant on data and makes rate decisions meeting by meeting, he may not provide any firm insight on the US rate future. Today’s conference will also feature remarks from ECB President Lagarde.

The announcement of the August flash PMIs from the US, UK, and Eurozone was the primary subject of yesterday’s macro diary. When compared to expectations throughout those regions, the survey results were disappointing.

The unanticipated contraction in their respective service sectors caused the composite PMIs for the Eurozone and UK to drop back to a contraction territory. despite the fact that the U.S composite PMI came in below expectations, it was still able to stay above the critical 50 breakeven point.

The most recent ECB meeting account and US durable goods for July are on today’s macro calendar. An early update on August retail activity will be provided by the UK CBI Distributive Trades Survey, but the publication is not usually market moving.

Meanwhile, the annual Jackson Hole Symposium, which is hosted by the US Federal Reserve, formally begins today, but Friday will feature important central bank speeches, including those from Fed Chair Powell and ECB President Lagarde.

Yesterday’s macro calendar was lacking data and had no directional impact on markets. The July existing home sales data in the United States was one of the few noteworthy releases. The home market update was weaker than anticipated.

The dollar was seen as having the upper hand in currency markets. Simultaneously, the euro was under slight downward pressure.

Meanwhile, sterling’s recent rise against the dollar came to a halt yesterday, with the GBP/USD pair falling back into the bottom part of the trading range.

Looking ahead to today, we receive the week’s primary data highlight with the release of August flash PMIs from the US, Eurozone, and UK. The survey results are expected to reflect a continuing discrepancy between the contracting manufacturing and growing services sectors.

Yesterday saw Currency movements restricted to small ranges. This was unsurprising given the shortage of data releases and central bank news.

Looking ahead to today, The August CBI industrial survey will provide a timely update on the state of the factory sector. While it attracts less attention than the PMI survey, which will be announced tomorrow. Orders did fall again last month, but the dip was the smallest since December.

Markets will be more focused on Fed Chair Powell’s Jackson Hole speech on Friday, where they will be expecting for some guidance on where US interest rates will go next.

The macro schedule is once again light. One of the few noteworthy releases is the July existing home sales statistics in the United States.

However, the dollar is unlikely to react strongly to the housing market update. As a result, the major currency pairs may remain restricted inside narrow ranges today.

Update 13 April 2023

GBP

The British pound rose against the Euro and Dollar yesterday morning after the release of the UK PMI data which showed the UK economy continued to expand in August, meanwhile, we saw similar surveys out of the Eurozone and U.S. showing contraction.  

Flash PMIs for August continued to show the UK economy weathering the global crisis better than the euro area where the recession alarms are already ringing.  

The UK is now one of the few major economies still posting positive numbers, but global weakness adds to recession risks here too.  

USD

The Dollar slipped back against the Euro and British Pound following data yesterday that showed a slowdown in the U.S. economy might have accelerated in August.  

Meanwhile, The Biden administration is expected to announce its biggest single package of military aid to Kyiv worth $3bn.  

The new tranche of American funding will help Kyiv acquire more weaponry, ammunition and other supplies for its armed forces, locked in a grinding war with Russian troops in the east and south with neither side advancing significantly in weeks.  

EUR

The Dollar slipped back against the Euro and British Pound following data yesterday that showed a slowdown in the U.S. economy might have accelerated in August.  

Meanwhile, The Biden administration is expected to announce its biggest single package of military aid to Kyiv worth $3bn.  

The new tranche of American funding will help Kyiv acquire more weaponry, ammunition and other supplies for its armed forces, locked in a grinding war with Russian troops in the east and south with neither side advancing significantly in weeks.  

If you or your company are impacted by currency risk please reach out to speak to one of our experts, we can assist with decision-making during this difficult time to help you protect your profits.