Home Daily Commentaries Currency markets consolidate ahead of GDP data out of the US

Currency markets consolidate ahead of GDP data out of the US

Daily Currency Update

The Euro managed to find some support today and traded to just under the 1.0700 level vs the Dollar and above 0.8712 vs Sterling. This happened even though the Bundesbank in Germany hinted that their own economy likely shrunk in Q3 this year.
Sterling also managed to find some support as markets expect unemployment to show the labour market in the UK is picking up pace. In addition, UK wage growth has slowed which should help inflation moderate through the rest of this year.

In the US analysts are suggesting GDP could have grown at 4.1% and Treasury yields remain high. So even though the Dollar gave back some ground today this is more than likely due to an unwinding of “long” Dollar positions in the market.

Key Movers

The ECB is due to set an interest rate policy and no change is expected. With major economies in the Eurozone lagging, it is likely we will see the Euro come under renewed pressure through the rest of this week.

In the UK we expect a continued uplift for the Sterling after the rating agency Moody’s upgraded the UK economy's long-term outlook to stable from negative. The Dollar has retreated before economic data which is due for release this week. We have had significant dollar strength through Q3, and it seems likely markets are taking a pause before renewed buying of Dollars and US assets.

Expected Ranges

  • GBP/USD: 1.2200 - 1.2350 ▲
  • GBP/EUR: 1.1440 - 1.1550 ▲
  • GBP/AUD: 1.9225 - 1.9325 ▲
  • EUR/USD: 1.0625 - 1.0750 ▼