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UK: Weekly FX Market Update 29 August

CalendarAugust 29, 2023
  • Last week's Purchasing Managers Index (PMI) data showed possible upcoming periods of contraction for UK manufacturing and services.

  • GBPUSD weakened by 1.5% after this news was released, whilst GBPEUR fell by a cent.

  • Bank of England economist Pill talks on Thursday, in what is a shortened and light week for GBP data,

  • Friday sees the release of US Non-Farm Payrolls.

  • The Eurozone has experienced two months of weak PMI readings, which has helped EURUSD lose nearly 5% since mid-July.

  • ECB President Lagarde still has to control eurozone inflation, and vowed at the Jackson Hole summit last week to set borrowing costs as high as needed, and to leave them there until inflation is back to its (2%) goal. Noticeably, the euro failed to strengthen.

  • Can Eurozone CPI, due for release on Thursday, push President Lagarde to hike again in September?

  • US dollar strength last week was possibly a product of both UK and Eurozone weakness.

  • Boston Fed President Collins, when referring to interest rates, said the Fed ‘may need additional increments’.

  • Fed Chair Powell said that the Fed ‘was prepared to raise rates further if appropriate’, helping to keep the dollar on the front foot. He continued that persistent 'above trend growth' would warrant further tightening. 

  • US preliminary GDP is released this Wednesday. If it shows above trend growth, will this produce more US dollar strength?

  • Will Friday's US Employment data keep the US dollar bulls happy?

Main events for this week:

Tue Aug 29

15:00 USD Consumer Confidence

Wed Aug 30

02:30 AUD CPI

07:30 EUR German Flash CPI

13:15 USD ADP Non-Farm Employment Change

13:30 USD Preliminary GDP/Goods Trade Balance

Thu Aug 31

08:15 GBP MPC Pill speaks.

10:00 EUR CPI Flash Estimate

13:30 USD Core PCE Price Index

Fri Sep 1

09:00 EUR Final Manufacturing PMI

09:30 GBP Final Manufacturing PMI

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

13:30 CAD GDP

15:00 USD ISM Manufacturing PMI


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".