Previous Day's Market Highlights
Sterling-dollar fell below June’s seven-month low of 1.3049 to hit a new low since September but has so far managed to hold onto the 1.30 level and avoid a drop into the 1.20s. The renewed decline in the pound came as CPI data missed estimates—notably core inflation fell below 2%–which weighed on interest rate hike expectations. Prior to the data, markets had been increasingly pricing in an August rate hike.
Sterling-euro also suffered losses and hit its lowest levels since March, briefly dipping below 1.12. However, it’s worth noting that sterling-euro has been trading in a fairly tight range in recent months: a wider band of around 1.11 to 1.16 has been seen at times, but 1.12-1.15 has been the main range.
The pound saw some support last night on reports that Brussels could consider an Article 50 extension, but it remained relatively subdued. Elsewhere, Fed Chair Powell’s second day of testimony was consistent with the first and therefore had little market impact. The Aussie gained overnight on a positive labour market report, which saw both Employment Change and the Participation Rate beat expectations.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
UK data releases continue today with Retail Sales (09:30 BST), which poses the next potential risk for the pound. Brexit uncertainty remains an ongoing threat to the pound’s strength.
The US releases mid-level data in the afternoon, with some dollar strength possible as weekly Initial Jobless Claims are forecast to remain little changed and the Philadelphia Fed Manufacturing (13:30) to pick up pace. However, the overall impact may be relatively limited. Fed member Quarles is giving the opening remarks via a pre-recorded video at the Alternative Reference Rates Committee Roundtable.
Today's Economic Calendar
|9:30am||GBP||Retail Sales YoY (Jun)||3.9%||4.4%|
|9:30am||GBP||Core Retail Sales YoY (Jun)||3.7%||4.4%|
|9:30am||GBP||Retail Sales MoM (Jun)||0.4%||1.3%|
|9:30am||GBP||Core Retail Sales MoM (Jun)||0.3%||1.3%|
|1:30pm||USD||Initial Jobless Claims (9 Jul)||220K||214K|
|1:30pm||USD||Philadelphia Fed Manufacturing Survey (Jul)||22.0||19.9|
|2:00pm||USD||Fed's Quarles Speaks|