GBP>EUR – 1.1069
GBP>USD – 1.3098
EUR>USD – 1.1832
GBP>CAD – 1.7476
GBP>AUD – 1.8154
GBP>SEK – 11.408
GBP>AED – 4.8101
GBP>HKD – 10.148
GBP>ZAR – 23.090
· AUD RBA Monetary Policy Statement
- Focus Nonfarm Payroll, could go either way and so can the markets.
- GBP Bears attack amid USD pullback ahead of NFP
- EUR Drops as Sino-US tension over shadow upbeat China exports
- USD Has the Fed let the inflation genie out of the bottle?
Cable posted a two-day low at 1.3098, drawing back from the 1.3187 five-month peak seen Thursday following the warily upbeat BoE outlook. The pound has also corrected from the post-BoE highs see against the euro and other currencies. Following a phase of outperformance, analysts are taking a circumspect view of the pound’s upside potential. Both Manchester and Aberdeen are back in lockdown, even though the city of Leicester has reopened after being locked down for most of the past month and where there has been no follow-through from higher new cases to and event impact of corresponding hospital admittances and mortality (note that the test for the coronavirus cannot distinguish between whether the virus is ‘live’ or is debris from a prior infection of the virus). The new lockdowns will erode economic activity metrics. Brexit also remains resolved, though off the agenda for now during the summer break. Talks are scheduled to resume on the week of August 17th. The final round of discussions is set for the week commencing October 2nd. Recent sourced articles in the UK press have suggested that there is greater scope for a deal being struck than the official line has suggested, and there is certainly incentive on both sides for a deal to be made, though it would remain to be seen how extensive a new trade deal would be
The narrow trade-weighted USD index (DXY) posted a two-day high at 93.16, extending the rebound from the 27-month low seen yesterday at 92.53. EUR-USD concurrently retreated to a 1.1819 low, which is a pip shy of yesterday’s low and 2 pips shy of making it a big figure correction from yesterday’s 27-month peak. USD-JPY continued to ply a narrow range (less than 15 pips) around the 115.50 mark. Both the Aussie and Kiwi dollars correctly moderately as the U.S. currency firmed. AUD-USD, after first edging out a high at 0.7243, which matches Wednesday’s 18-month peak, ebbed to a low at 0.7196. USD-CAD lifted to a three-day high at 1.3372. Front-month WTI futures were soft for a second day, maintaining sub-$42.0 levels after posting a five-month high earlier in the week at $42.52. Gold prices corrected below $2,050.0 after printing a fresh nominal record high at $2,077.85. The ascent of gold has been a reflection of investor concerns over the risk of there being an eventual pop in inflation as a consequence of massive global fiscal stimulus efforts and massive global monetary uber-accommodation, although there has been scant sign of this happening thus far, with disinflation remaining in force and with much of the U.S. yield curve and other sovereign benchmark yields either at or near record lows. In the mix is speculation that the Fed and possibly other major central banks, maybe amid a strategic shift to allow higher inflation.
XE Market Analysis Europe – 7th 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.