ECB Guidance Awaited

The highlights today are the ECB's latest announcements and US Durable Goods Orders.

Previous Day's Market Highlights

The euro came under pressure on reports of Trump’s commitment to auto tariffs. However, the euro later gained on reports of the introduction of a bill in the Senate to delay the auto tariffs and the Trump-Juncker agreement to work towards “zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods”. This led to a risk-on sentiment across markets, seeing gains in equities. The S&P 500 closed at its highest levels since the end of January. The dollar was softer around the announcement.
 
Overnight, sterling-dollar tested 1.32 to trade at its highest levels since 17 July. Euro-dollar regained 1.17. Sterling-euro continued to trade in the 1.12-1.13 band.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1253 1.1364 1.1163 1.77%
GBP/USD 1.3195 1.3363 1.2958 3.03%
EUR/USD 1.1724 1.1791 1.1527 2.24%
GBP/AUD 1.7759 1.7958 1.7569 2.17%
GBP/NZD 1.9315 1.9622 1.9155 2.38%
GBP/CAD 1.7211 1.7479 1.7168 1.78%

Today's Market Highlights

The ECB is expected to keep policy unchanged when it announces its latest decision this afternoon (12:45). In June, the Bank announced that it would wind down asset purchases by the end of the year and keep interest rates on hold until at least next summer. As a result, investors will mainly be looking for the Bank’s updated inflation outlook and any signals that the timeline for a future rate hike could shift either forward or back. If little new is gleaned from today’s comments, the euro impact may be limited.
 
The dollar could strengthen on a gain in Durable Goods Orders (13:30). Tomorrow, the US releases the first estimate of Q2 GDP, where an expected acceleration could also prove dollar supportive.

Today's Economic Calendar

Time Currency Release Consensus Previous
12:45 EUR ECB Deposit Rate Decision -0.4% -0.4%
12:45 EUR ECB Interest Rate Decision 0% 0%
13:30 EUR ECB Press Conference
13:30 USD Initial Jobless Claims (16 Jul) 215K 207K
13:30 USD Durable Goods Order (Jun) 3.0% -0.6%
13:30 USD Core Durable Goods Order (Jul) 0.5% -0.3%

Caxton