Today’s Rates & Market News

Today’s Rates

GBP>EUR – 1.1074

GBP>USD – 1.3109

EUR>USD – 1.1841

GBP>CAD – 1.7603

GBP>AUD – 1.8245

GBP>SEK – 11.394

GBP>AED – 4.8166

GBP>HKD – 10.160

GBP>ZAR – 22.230

Today’s Calendar     

·         CNY Non-Manufacturing PMI(Jul)

·         CNY NBS Manufacturing PMI(Jul)

·         GER Retail Sales (YoY)(Jun)

·         EUR Consumer Price Index – Core (YoY)(Jul) PREL 

·         EUR Gross Domestic Product s.a. (QoQ)(Q2) PREL 

·         EUR Consumer Price Index (YoY)(Jul) PREL 

·         EUR Gross Domestic Product s.a. (YoY)(Q2) PREL 

 

Today’s Highlights

  • GBP>USD refreshers multi-WK top beyond 1.31, despite Brexit/Corvid woes
  • EUR>USD Peeps above 1.19 on persistent USD sell-off
  • US Spending & Prices June Preview: After all the agony just an average QTR?
  • USD To drop another 5-10% over the next 2-Yrs? – Charles Schwab

(https://frank-exchange.com/)

Markets

 GBP

Cable pinned a new five-month peak, at 1.3143. The pair is now firmly back in pre-lockdown territory. The UK currency still registers as the weakest of the main currencies on the year-to-date, and by some distance in trade-weighted terms, while recent dollar underperformance has been somewhat flattering the pound. Nevertheless, there are some convincing bullish arguments in market narratives. One is the pick-up in the pace of economic recovery in the UK, as evidenced by the much stronger than forecast preliminary July PMI data and improvement in the CBI’s July distributive sales report, which flagged a nearly full recovery in the retail sector, with sales in upcoming months seen at near seasonal norms. There have also been signs that have led markets to factor improved odds for an EU-UK trade deal, with several sourced press reports suggesting that discussions are going better than the official line suggests. Analysts see scope for Cable returning to levels around the 1.3500 mark.

World

The dollar continued lower in what is now the biggest monthly decline the U.S. currency has seen in a decade. The narrow trade-weighted USD index printed a fresh 26-month low at 92.59, the culmination of a 5% decline from the finishing level in June and marking just over a 10% drop from the highs seen in early March. U.S. Treasury yields have printed fresh lows, with the 30-year bond in record low territory, extending declines seen since yesterday’s release of U.S. Q2 GDP data, which came in at a dismal -32.9% y/y, although this met the consensus expectation. President Trump’s Tweeted suggestion that the presidential election in November should be postponed has also been in the mix, added a political element to arguments that the pandemic has precipitated a further erosion in the dollar’s reserve currency status. The EU’s recently greenlighted recovery fund is also seen as the first step in shared fiscal responsibility in the Eurozone, which by all accounts has triggered a re-weighting of euros in currency portfolios at the expense of the dollar. Gold prices have lifted to back within a couple of dollars of the record nominal high seen earlier in the week at $1,974.90. EUR-USD, amid its sixth consecutive week of accelerating gains, has pegged a fresh 26-month high at 1.1908. Cable pinned a new five-month peak, at 1.3143. USD-JPY posted a five-month low at 104.19. AUD-USD saw a 17-month high at 0.7228. USD-CAD has been an exception to the U.S. dollar weakening theme, with the pairing consolidating in the lower 1.3400s after making a nine-day high at 1.3461 yesterday. The Canadian dollar has been affected by the drop in oil prices over the last day. Front-month WTI crude futures hit a three-week low on Thursday at $38.72, and while since recouping to levels near $40.0, remain down by over 2.5% from week-ago levels. Data out of Asia today were highlighted by encouraging July PMI survey data out of China, and an above-forecast 2.7% m/m rise in Japanese production

XE Market Analysis Europe – 31st Jul 2020

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result.  Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.

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