Markets await Powell’s Jackson Hole keynote today

Daily Currency Update

In the UK, August’s S&P composite PMI hit 53, the highest in a year, driven by services (53.6) while manufacturing lagged at 47.3. Inflation remains elevated with July CPI at 3.8% and forecasts near 4%, pushing rate-cut expectations out to spring 2026. Sterling draws support from services strength, but sticky inflation caps upside.

In the U.S., the dollar gained 0.9% last week, with the DXY at 98.75, as hopes for a September 25 bp cut fell to 75% from 92% ahead of Powell’s Jackson Hole speech. Despite political noise, U.S. assets saw $643B in H1 inflows, including $410B in Q2, underscoring confidence in returns. The dollar holds firm on fading rate-cut bets and safe-haven demand, though longer-term risks persist.

Meanwhile, the EU is accelerating work on a digital euro, exploring public blockchains like Ethereum and Solana in response to U.S. stablecoin regulation. The euro stays steady as policymakers build digital resilience for the long run.