UK: Weekly FX Market Update 5 June
GBP
With the spotlight elsewhere, the pound had a good week against the US Dollar and Euro. Gaining 1% against both the US dollar and euro.
GBPEUR hit a 6 month high.
Some analysts attributed this strength to divergence between the Bank of England and its interest rate path when compared to the US Federal Reserve and European Central Bank .
UK Services PMI is the only top tier economic release for the pound this week.
EUR
The euro managed a bounce higher against the US dollar last week, providing the biggest one-day advance in nearly a month.
However, Eurozone inflation coming in weaker than expected last week.
The market will keenly watch Eurozone data releases of Sentix investor confidence, retail sales and revised GDP for direction.
German data due for release includes factory orders and industrial production. Can the data give hope that Germany’s economy can pull itself out of recession?
USD
Possible catastrophe was averted as the budget ceiling agreement was passed into law by President Biden over the weekend.
The US dollar has been soft since the agreement was passed by the House of Representatives.
Non-Farm Payrolls data last Friday showed a strong jobs market once again. Will the Fed hawks win the day and hike rates on June 14th encouraging a stronger US dollar?
Market expectations for a June hike or pause have been swinging wildly the over the past two weeks. Fed’s Harker is the latest member to suggest a pause is possible on June 14th.
Events for the week ahead:
Mon Jun 5
09:00 EUR Final Services PMI
09:30 EUR Sentix Investor Confidence
09:30 GBP Final Services PMI
15:00 USD ISM Services PMI
Tue Jun 6
05:30 AUD RBC Int Rate Decision
07:00 EUR German Factory Orders
10:00 EUR Retail Sales
Wed Jun 7
00:20 AUD RBA Gov Lowe Speaks
02:30 AUD GDP QoQ
02:30 CNY Trade Balance
07:00 EUR German Industrial Production
13:30 USD Trade Balance
15:00 CAD Bank of Canada Interest Rate Decision
Thu Jun 8
00:50 JPY Final GDP
10:00 EUR Revised GDP
Fri Jun 9
00:50 CNY CPI
13:30 CAD Employment Data