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UK: Weekly FX Market Update 21 August

CalendarAugust 21, 2023
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GBP
  • Holiday markets are here, however, sterling has remained resilient.

  • UK Average Earnings hit 8.2% and Core CPI stays steady at 6.9%.

  • Bloomberg analysts now expect UK rates to hit 6% - could this create new highs for the pound?

  • UK Flash Manufacturing and Services PMI on Wednesday could provide direction this week.

EUR
  • As GBPUSD grinds higher, EURUSD diverges lower.

  • Previously hawkish ECB member Kazak turned dovish on Euro interest rates.

  • Eurozone Industrial production jumped higher by 1% last month but couldn’t help the euro gain against the pound and dollar

  • Can the euro overcome market worries about eurozone energy supply costs and sticky inflation?

  • Last month Flash Manufacturing and Services PMI started the EURUSD decline. Will they stay negative on Wednesday?

USD
  • The US economy is performing well and interest rates are expected to stay elevated into 2024.

  • FOMC Meeting Minutes continued to note that inflation risks ‘could require further tightening’ - will this strengthen the dollar going forward?

  • What message will the Federal Reserve give us at the Jackson Hole Symposium this week?


Main events for this week:

Mon Aug 21

No Top Tier Data

Tue Aug 22

All Day BRICS Summit

15:00 USD Existing Home Sales

19:30 USD FOMC Goolsbee and Bowman Speak

Wed Aug 23

All Day BRICS Summit

09:00 EUR Flash Manufacturing and Services PMI

09:30 GBP Flash Manufacturing and Services PMI

14:45 USD Flash Manufacturing and Services PMI

15:00 USD New Home Sales

Thu Aug 24

All Day BRICS Summit

All Day US Federal Reserve Jackson Hole Symposium

13:30 USD Unemployment Claims

Fri Aug 25

All Day US Federal Reserve Jackson Hole Symposium

07:00 EUR German Final GDP

09:00 EUR German IFO Business Climate

15:00 USD Revised UoM 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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