Today’s Rates & Market News

Today’s Rates

GBP>EUR – 1.1113

GBP>USD – 1.3065

EUR>USD – 1.1752

GBP>CAD – 1.7536

GBP>AUD – 1.8373

GBP>SEK – 11.460

GBP>AED – 4.7980

GBP>HKD – 10.121

GBP>ZAR – 22.560

This Week’s Calendar     

·         USD Markit Manufacturing PMI(Jul)

·         AUD Retail Sales s.a. (MoM)(Jun)

·         AUD Trade Balance (Jun)

·         AUD RBA Interest Rate Decision

·         UD RBA Rate Statement

·         NZD Employment Change(Q2)

·         NZD Unemployment Rate(Q2)

·         EUR Retail Sales (YoY)(Jun)

·         USD ISM Non-Manufacturing PMI(Jul)

·         JPY Gross Domestic Product (QoQ)(Q2) PREL 

·         GBP Bank of England Monetary Policy Report

·         GBP BoE MPC Vote Unchanged

·         GBP BoE Asset Purchase Facility (Aug)

·         GBP Monetary Policy Summary

·         GBP BoE MPC Vote Cut

·         GBP Bank of England Minutes

·         GBP BoE MPC Vote Hike

·         GBP BoE Interest Rate Decision

·         GBP BoE’s Governor Bailey speech

·         AUD RBA Monetary Policy Statement

·         USD Nonfarm Payrolls (Jul)

·         CAD Unemployment Rate (Jul)

·         CAD Net Change in Employment (Jul)

 

Today’s Highlights

  • USD sentiment on dollar reaches Bearish extremes
  • GBP Eyes on UK Manufacturing PMI’s for direction
  • Week Ahead can Non-Farm payrolls halt the Dollar’s descent?
  • Eyes On BoE for Super Thursday.

 

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

Markets

GBP

Cable has put in some distance from Friday’s 1.3171 trend peak in pulling back to a low at 1.3057. A rebound in the U.S. currency has been at play. The UK currency outperformed last week, though 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. There is now summer a hiatus in negotiations, which will resume on the week of August 17th. We see scope for Cable returning to levels around the 1.3500 mark.

World

The dollar has lifted, with the narrow trade-weighted USD index posting its best level since last Thursday, at 93.70, extending a rebound from the 25-month low that was seen on Friday at 92.55. EUR-USD concurrently ebbed to a below Friday’s low on route to a low at 1.1741, extending the correction from Friday’s 26-month peak at 1.1910. Cable similarly put in some distance from Friday’s 1.3171 trend peak in pulling back to a low at 1.3057. USD-JPY printed a 10-day peak at 106.43, which is over 2 big figures up on Friday’s five-month low at 104.18. AUD-USD descended to 0.7118, which is the pair’s lowest level since last Tuesday and extends correction from the 17-month peak that was seen on Friday at 0.7229. USD-CAD has traded firmer, though has remained within its Friday range, posting an intraday high at 1.3429. Oil prices are trading relatively steadily, above Friday’s correction lows. Gold prices hit a fresh nominal record peak soon after the open in Asia-Pacific markets today, at $1,994.20, before capping out and settling to near net unchanged levels under $1,980.00. Stock markets in Asia have been mixed, while S&P 500 futures decline moderately. Japan’s Nikko 225 outperformed, closing with a 2.2% gain, buoyed by the bounce in USD-JPY, while the MSCI Asia-Pacific index (ex-Japan) ebbed by 0.5%. In news, the U.S. Congress is struggling to finalize a new fiscal relief package, despite pandemic-era unemployment benefits having expired on Friday. The impact of lockdown measures in response to the coronavirus remains a concern, too, although the media and many governments continue studiously overlooking the evidence of herd immunity developing in places where it has run its course (and not to mention that the SARS Cov-2 coronavirus, while highly contagious and bad news for the vulnerable, is not anywhere near avirulent for the broader population as feared back in March).

XE Market Analysis Europe – 3rd Aug 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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