UK: Weekly FX Market Update 27 July

GBP

• New PM Burnham takes the reins and sterling swoons lower.

• Retail sales beat expectations and possibly halt the pound's weakness.

• Bloomberg analysts expect a rate hike from the Bank of England by November. With the oil price jumping higher, will the Bank bring this forward to September?

EUR

• The ECB discussed a possible rate hike last week. President Lagarde says the full impact of the energy shocks from the Iran war ‘is yet to play out’.

• Bloomberg analysts now give the ECB an 87% chance of delivering a 0.25% September rate rise.

• Will Eurozone CPI on Friday push the ECB even closer to that September rate change?

USD

• The US-Iran war escalates again with the Houthi rebels attacking shipping in the Red Sea.

• The Fed sets rates on Wednesday. US yields have jumped higher on the Iran war escalation. Will the Fed respond with a rate hike and hawkish rhetoric?

• Trump imposes new tariffs up to 12.5% on trading counterparts. Democrat Neal says, ‘forced labour justifications (for the tariffs) are just too convenient to be taken seriously’. How long will the tariffs last and what effect will they have on the US economy? US GDP is released on Thursday.

Mon Jul 27

13:30 USD Durable Goods

Tue Jul 28

All Day OPEC Meetings

13:15 USD ADP Weekly Employment Change

13:30 USD Goods Trade Balance

15:00 USD Consumer Confidence

Wed Jul 29

02:30 AUD CPI

19:00 USD FOMC Interest Rate Decision

19:30 USD FOMC Press Conference

Thu Jul 30

07:00 EUR German Preliminary CPI

09:00 EUR German Preliminary GDP

10:00 EUR Preliminary Flash GDP

12:00 GBP Bank of England Interest Rate Decision/Monetary Policy Summary

13:30 USD Advance GDP

13:30 USD Core PCE Price Index/Unemployment Claims

Fri Jul 31

00:30 JPY Tokyo Core CPI

05:00 JPY Bank of Japan (BoJ) Interest Rate Decision

05:30 JPY BoJ Press Conference

10:00 EUR CPI Flash Estimate

15:00 USD Revised UoM Consumer Sentiment/Inflation Expectations