Sterling Ticks Up from Lows

Sterling has picked up from Thursday's lows. Central bank speakers are in focus today.

Previous Day's Market Highlights

Given the lighter calendar Friday, rate movement was more contained. Sterling-euro held above 1.13 as sterling-dollar maintained 1.35, while euro-dollar made gains above 1.19 as the dollar saw some afternoon softness. The Canadian dollar weakened Friday after a disappointing labour market report. Net Change in Employment fell into the negatives and the Participation Rate slowed.
 
Notable last week was sterling price movement around the Bank of England meeting. The pound fell to its lowest levels against the dollar since January on Thursday after the BoE held interest rates, as was by then expected, and was less hawkish than some investors had anticipated. Cable met support around 1.3460, just above January’s low of 1.3458, and later rebounded above 1.35, helped by a disappointing US CPI release. Those lows marked a 6% decline since 17 April, when the rate had hit a new high since the referendum.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1333 1.1600 1.1302 2.57%
GBP/USD 1.3550 1.4376 1.3460 6.37%
EUR/USD 1.1955 1.2414 1.1822 4.77%
GBP/AUD 1.7951 1.8478 1.7909 3.08%
GBP/NZD 1.9507 1.9755 1.9247 2.57%
GBP/CAD 1.7323 1.8039 1.7224 4.52%

Today's Market Highlights

With no major economic data out today, attention will primarily be on a raft of central bank speakers. In the morning, ECB board member Mersch will give the keynote speech at the Central Bank Governors’ Club Meeting in Turkey (11:00 BST), followed by speeches from the ECB’s Lautenschläger (11:15, 16:00), Praet (12:45, 17:00), and Cœuré (18:45). Of note amongst those speeches may be Lautenschläger’s comments at Danmarks Nationalbank’s seminar on economic and financial issues and Cœuré’s speech at the International Center for Moentary and Banking Studies’ conference on the world economy.
 
Non-voting Bullard is the Fed speaker on the agenda today, but he will be speaking at a Crypto Conference (14:40). As such, his comments may have limited dollar impact and any monetary policy clues will likely remain in line with recent dovish remarks. Overnight, the RBA releases its meeting minutes and RBA Assistant Governor Debelle speaks twice, on first “The Outlook for the Australian Economy” and then “Interest Rate Benchmark Reform”.  
 
Looking to the rest of the week brings a few more data highlights. Tuesday is a particularly busy day with German GDP, the second estimate of Eurozone GDP, and UK labour market data out in the morning, followed by US Retail Sales in the afternoon. Eurozoneand German CPI will be of interest on Wednesday, whilst Fed speeches and housing data will occupy USD trader attention. Australian labour market data follow on Thursday, with Eurozone trade data and Canadian CPI and Retail Sales to round things out on Friday.

Today's Economic Calendar

Time Currency Release Consensus Previous
11:00 EUR ECB's Mersch Speaks
11:15 EUR ECB's Lautenschlager Speaks
12:45 EUR ECB's Praet Speaks
14:40 USD Fed's Bullard Speaks
16:00 EUR ECB's Lautenschlager Speaks
17:15 EUR ECB's Praet Speaks
18:45 EUR ECB's Coeure Speaks
00:10 AUD RBA Assistant Governor Debelle Speaks
02:30 AUD RBA's Meeting Minutes
02:40 AUD RBA Assist Gov Debelle Speaks

Caxton