Currency news

Markets draw breath ahead of key economic data

Chief Market Strategist at Equals Money
-
3
min read
Published:
August 12, 2024
    • GBP: BoE’s Mann warns inflation fears remain
    • EUR: Weakens as broader market confidence returns
    • USD: All eyes on US Inflation data  


    Currency recap

    Following market turmoil at the start of last week, a sense of calm was restored after weekly US jobs data came in better than forecast, helping markets regain some of their losses. Earlier calls for an emergency Fed rate cut dissipated, with interest rate markets now tempering their expectations of a 0.50% cut at the next FOMC meeting down to 50% from 100%.

    This week could prove pivotal to the next UK and US monetary policy moves as a barrage of key Tier 1 economic data is slated for release. US year-on-year inflation data is expected to ease slightly, and headline Monthly Retail Sales are forecast to rebound from the prior month’s flat reading.

    In the UK, the Unemployment Rate is forecast for a slight increase, whilst the Headline Inflation rate is expected to increase to 2.3% versus the prior month’s reading of 2%.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.56% 1.9390
    GBPCAD 0.24% 1.5225
    GBPCHF 0.85% 1.1072
    GBPDKK 0.48% 8.7275
    GBPEUR 0.48% 1.1695
    GBPJPY 0.68% 187.9300
    GBPNOK 0.80% 13.7850
    GBPNZD 0.23% 2.1230
    GBPSEK 0.77% 13.4200
    GBPUSD 0.40% 1.2770


    *Daily move - against
    G10 rates at 7:30am, 12.08.24

    ** Indicative rates - interbank rates at 7:30am, 12.08.24

    Key data points

    Currency Event Period Consensus Previous
    USD Consumer Inflation Expectations Jul N/A N/A

    Upcoming speeches

    • None today.

    What we think

    Market turmoil could be rekindled this week as we look to the latest release of the US inflation report due Wednesday and Retail Sales slated for Thursday. With increasing fears of an imminent US recession, sticky inflation and a weaker Retail Sales report could send equity markets lower once again and increase the chances of a 50bps interest rate cut at the next Fed meeting.

    Over in the UK, key economic data is scheduled for release, including the latest read on Employment, Inflation and Retail Sales. Elsewhere, US politics continues to see Kamala Harris gain ground on Donald Trump in the race to the White House. The latest opinion polls show the Democrats ahead in key swing states.

    Geopolitics continue to rile markets, with the Israeli defence minister telling the US that Iran is preparing for a large-scale attack on Israel. This prompted the Pentagon to announce they have ordered the deployment of US Strike groups to the region.

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