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UK: Weekly FX Market Update 10 July

CalendarJuly 10, 2023
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GBP

  • Sterling had a volatile week, gaining against the euro and US dollar after a choppy end to the weeks trading.

  • Bank of England Gov Bailey speaks twice this week, however, further attention may be given to the release of the Financial Stability Report on Wednesday.

  • UK Average Earnings are announced on Tuesday. Will they point to a possible wage-price spiral occurring in the UK?

  • UK GDP is released on Thursday. Could this show the UK economy faltering in the face of persistent interest rate hikes?

EUR

  • ECB President Lagarde continues to warn of higher interest rates, stating that the ECB ‘wont stand idly by if margins and wages rise’.

  • Investors will look to ZEW Economic Sentiment, EU Economic Forecasts and EU Trade data for direction this week.

  • The single currency could also make a move after the release of US CPI on Wednesday.

USD

  • The FOMC meeting minutes were released on Wesnesay, showing a continued desire from the Fed to hike rates twice more this year.

  • Dallas Fed President Logan confirmed his support later in the week, that more rate hikes may be necessary.

  • US employment data released last Friday showed slightly weakening Non-Farm Payrolls, although average hourly earnings on a monthly basis rose from 0.3% to 0.4%.

  • US CPI could be the market highlight this week. Will the headline rate dip below last month’s 4% reading?

  • Will core CPI fall below last months 5.3% reading or remain ‘sticky’ and encourage more US rate hikes?

  • Consumer Sentiment will round the week off.

Events for the week ahead:

Mon Jul 10

15:00 USD FOMC Barr Speaks

20:00 GBP BoE Gov Bailey Speaks

Tue Jul 11

00:01 GBP BRC Retail Sales Monitor

02:30 AUD NAB Business Confidence

07:00 GBP Claimant Count Change/Unemployment Rate/Average Earnings

10:00 EUR German ZEW Economic Sentiment

Wed Jul 12

03:00 NZD RBNZ Interest Rate Decision/Statement

04:10 AUD Reserve Bank of Australia Gov Lowe Speaks

07:00 GBP Bank of England Financial Stability Report

09:00 GBP BoE Gov Bailey Speaks

13:30 USD CPI

15:00 CAD Bank of Canada Interest Rate Decision

16:00 CAD Bank of Canada Press Conference

Thu Jul 13

07:00 GBP GDP/Goods Trade Balance/Manufacturing Production

10:00 EUR EU Economic Forecasts

13:30 USD Producer Price Index

Fri Jul 14

10:00 EUR Trade Balance

15:00 USD Prelim Uni of Mich Consumer Sentiment

Author

Trevor Charsley

Trevor Charsley

Senior Market Strategist

Trevor has over 25 years' trading and sales experience. He produces regular market and technical analysis as well as help with the structure and management of FX hedging policies. Trevor is often listed among the top "currency forecaster on Bloomberg".

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