UK: Weekly FX Market Update 24 August

GBP

• Last week the UK’s private sector regular pay growth slowed to the lowest level since October 2020. However, Sterling ignored this data and pushed higher.

• As the US Treasury tries to cap long-term yields, investors sell the US dollar.

• Month-end flows and the Jackson Hole symposium could provide momentum for this week.

EUR

• ECB Economist Lane has been clear: the ECB must prioritise curbing the pace of price increases to avoid inflation “staying too high for too long”.

• Elsewhere, US Treasury Secretary Bessent adds liquidity to the bond market, resulting in a stronger EUR/USD over the week.

• Will the release of ECB monetary policy meeting accounts provide support for EUR/USD this week?

USD

• Treasury Secretary Bessent signalled unease at US 30-year Treasury yields reaching their highest level since 2007. Yields initially moved lower, before bouncing straight back.

• Bloomberg says that Bessent is at risk of losing credibility as the bond market ignores his wishes.

• US-Canada trade talks have collapsed, with Canadian PM Carney saying Canada is at “war” with the US over trade.

• Top-tier Dutch bank ING says that we could now see a ‘US dollar sell-off’.

Mon Aug 24

19:00 USD Treasury Sec Bessent speaks

Tue Aug 25

09:00 EUR German IFO Business Climate

15:00 USD Consumer Confidence

Wed Aug 26

02:30 AUD CPI

13:30 USD Core PCE Price Index/Preliminary GDP/Durable Goods

Thu Aug 27

All Day Jackson Hole Symposium

12:30 EUR ECB Monetary Policy Meeting Accounts

13:30 USD Unemployment Claims

Fri Aug 28

All Day Jackson Hole Symposium

13:30 CAD GDP

15:00 USD Prelim Benchmark Payrolls Revision

Sat Aug 29

All Day Jackson Hole Symposium