Previous Day's Market Highlights
The dollar firmed against the euro yesterday amid renewed risk aversion as trade tensions remained in focus. Sterling-dollar traded either side of 1.30 after overnight highs in the lower half of the 1.30-1.31 band. Euro-dollar fell below 1.17 towards 1.16. The pound was relatively steady against the commodity currencies, reversing a slight morning dip, and inched higher against the euro, which lost ground as the dollar gained. This brought 1.12 back in sight for sterling-euro although the rate met resistance ahead of the key level.
The Canadian dollar fell yesterday afternoon after Q2 GDP missed estimates. Elsewhere on the data calendar, core PCE hit 2% as forecast, supporting the argument for higher interest rates in the US.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The main release today is the preliminary estimate of August CPI in the Eurozone (10:00 BST). Headline inflation is forecast to hold steady at 2.1% with core inflation at a more subdued 1.1%. This would mark headline inflation’s third consecutive month at 2% or higher. Traders will be particularly looking for any signs of an acceleration in core inflation, which could lead the ECB to consider raising interest rates sooner.
Based on its current inflation outlook, the ECB expects to keep interest rates on hold until at least next summer. As such, a pick-up in the release could strengthen the euro, while a slowdown could weigh on the single currency; as forecast, the release may have a limited impact. A continued decline in the Unemployment Rate could also prove euro supportive.
A light afternoon calendar consists mainly of the Chicago Purchasing Managers’ Index (15:00), which is projected to slow and may therefore weigh on the dollar. Trade headlines, particularly regarding negotiations between the US and Canada, will remain in focus today as well.
Highlights next week include the UK’s PMIs, Australian GDP, the latest Bank of Canada interest rate decision, and the US’s August jobs report. Monday is a bank holiday in the US and Canada.
Today's Economic Calendar
|10:00am||EUR||Unemployment Rate (Jul)||8.2%||8.3%|
|10:00am||EUR||Prelim CPI YoY (Aug)||2.1%||2.1%|
|10:00am||EUR||Prelim Core CPI YoY (Aug)||1.1%||1.1%|
|2:45pm||USD||Chicago Purchasing Managers' index (Aug)||63.0||65.5|
|3:00pm||USD||Michigan Consumer Sentiment (Aug)||95.5||95.3|