UK: Weekly FX Market Update 1 September

GBP

• Fed Chair Warsh’s Jackson Hole speech has been taken as hawkish, sending GBP/USD lower.

• Ahead of the budget on 28th October, what will keep Sterling supported?

• With the ECB in hawkish mode and the Eurozone economy showing signs of life, could GBP/EUR take a tumble?

EUR

• Bloomberg analysts price in a 0.25% ECB rate hike on September 10th, followed by another in February 2027.

• German business sentiment is improving, with IFO President Fuest saying that the German economy is “recovering”.

• What will Tuesday’s Eurozone CPI release show for inflation?

USD

• Fed Chair Warsh’s Jackson Hole speech stressed that the Fed still has “work to do”, as inflation is not moving toward 2% quickly enough.

• Bloomberg analysts now give a 66% chance of a rate hike on 16th September. Will the USD continue to strengthen on Warsh’s comments, or follow Treasury Secretary Bessent’s lead and move lower?

• Friday’s US jobs report could put the Fed in a bind. Should they lean dovish on weak employment data, or remain hawkish as inflation creeps higher?

Mon Aug 31

07:00 EUR German Preliminary CPI

Tue Sep 1

10:00 EUR CPI Flash Estimate

15:00 ISM Manufacturing PMI

Wed Sep 2

14:45 CAD Bank of Canada (BoC) Interest Rate Decision/Statement

15:30 CAD BoC Press Conference

Thu Sep 3

07:30 CHF CPI

13:30 USD Unemployment Claims

15:00 ISM Services PMI

Fri Sep 4

13:30 CAD Employment Report

13:30 USD Unemployment Rate/Non-Farm Payrolls/Average Hourly Earnings