GBPEUR Regains 1.08 As Euro Pulls Back

The euro lost ground yesterday on profit-taking as euro-dollar pulled back below 1.1900, down from Tuesday’s highs around 1.2070, its highest levels since January 2015. Sterling-euro rose towards 1.0900 but met resistance ahead of the key level.

Previous Day's Market Highlights

The euro lost ground yesterday on profit-taking as euro-dollar pulled back below 1.1900, down from Tuesday’s highs around 1.2070, its highest levels since January 2015. Sterling-euro rose towards 1.0900 but met resistance ahead of the key level.
 
The main data of the day came from the US in the afternoon session. The dollar received further support against the euro as the ADP Employment Change figure come in above forecast at 237K and Q2 GDP was revised higher, from 2.6% to 3.0%.
 
The dip in sterling-dollar following the releases was short lived as cable quickly rebounded above 1.2900 from its session low around 1.2876.
 
The kiwi has been under pressure recently, in part due to RBNZ comments that a weaker rate is needed, and in overnight trading sterling-kiwi broke above 1.8000 for the first time in nearly three months. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.0862 1.1208 1.0745 4.13%
GBP / USD 1.2916 1.3272 1.2777 3.73%
EUR / USD 1.1890 1.2070 1.1662 2.99%
GBP/AUD 1.6347 1.6743 1.6165 3.45%
GBP / NZD 1.8029 1.8070 1.7522 3.03%
GBP / CAD 1.6338 1.6727 1.6006 4.31%

Today's Market Highlights

As the month ends, Eurozone CPI and Core CPI are the data of note this morning (10:00 BST). Eurozone inflation is forecast to have risen to 1.4% in August from 1.3% in July, which may support the euro. Traders will closely watch for any acceleration in inflation for clues as to the possible guidance the ECB may provide when it meets next week.
 
During the afternoon session, the US releases weekly Initial Jobless ClaimsPersonalIncome and expenditures, housing, and Chicago PMI data (13:30, 14:45, 15:00 BST). Markets are keeping an eye on the strength of the economy and any sign of rising prices as softer inflation prompts a more cautious tone from the Fed.
 
Canadian GDP is forecast to slow to 0.1% month on month, which may weigh on the loonie.
 
There is no UK data of note today ahead of tomorrow’s Manufacturing PMI release. MPCMember Saunders spoke on monetary policy this morning in Cardiff, but market reaction to this was muted.

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Unemployment Rate (Jul) 9.1% 9.1%
10:00 EUR Preliminary CPI YoY (Aug) 1.4% 1.3%
10:00 EUR Preliminary Core CPI YoY (Aug) 1.2% 1.3%
13:30 USD Personal Spending (Jul) 0.4% 0.1%
13:30 USD Personal Income MoM (Jul) 0.3% 0.3%
13:30 USD Personal Consumption Expenditures Price Index YoY (Jul) 1.4% 1.4%
13:30 USD Core Personal Consumption Expenditures Price Index YoY (Jul) 1.4% 1.5%
13:30 USD Initial Jobless Claims (Aug 25) 237K 234K
13:30 CAD GDP MoM (Jun) 0.1% 0.6%
13:30 CAD GDP Annualised QoQ (Q2) 3.7% 3.7%
14:45 USD Chicago Purchasing Mangers' Index (Aug) 58.5 58.9
15:00 USD Pending Home Sales YoY (Jul) 0.5% 0.7%