USD volatile after Jackson Hole
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Daily Currency Update
A UK bank holiday yesterday meant there was no macroeconomic data for the GBP to get direction from. Date from Europe showed German ifo business climate beat forecast, growing to 89.0 and the highest level in more than a year. This shows business morale is improving and a indictor of economic health. US new home sales also saw an uptick yesterday coming in at 652k versus a forecast 635k.GBP/USD has fallen from the gains seen on Friday where the currency pair touched 1.3540. This followed Federal Reserve Chair Jerome Powell comments at Jackson Hole opened the door to cutting interest rates for the first time in nearly a year. Concerns surround the pace of jobs growth, with hiring in July seeing a sharp slowdown alongside weaker payroll gains in May and June. This also sent EUR/USD up to 1.1745 on Friday. However, both currency pairings are back down at 1.3460 and 1.1640 respectively. GBP/EUR has fallen just short of 1.1590 in the past hour.
Key Movers
Data remains muted today with only US durable goods orders to keep an eye out for. Noise elsewhere seems to surrounds President Donald Trump who announced he was firing Governor Lisa Cook, which seems to be his latest attack on the independence of the U.S. central bank. It also seems the ‘Trump Tariffs’ may be returning with subsequent additional tariffs to be imposed on countries that have digital taxes that would affect companies such as Google, Facebook, Apple and Amazon. This would see additional taxes on a number of European countries, as well as China. Risk sentiment is low on the back of this and has added the USD gains since Monday.Expected Ranges
- GBP/USD: 1.3410 - 1.3540 ▼
- GBP/EUR: 1.1530 - 1.1610 ▲
- GBP/AUD: 1.0620 - 2.0860 ▼
- EUR/USD: 1.1550 - 1.1740 ▲