The Pound & Euro Hit 11-Day Highs Against USD

Dollar softness continued, enabling the pound and euro to make gains. UK PSNB is in focus today amidst a light calendar.

Previous Day's Market Highlights

Sterling was a touch firmer yesterday amidst a light data calendar, although it remained within recent trading bands. The pound failed to breach 1.12 in a morning run higher against the euro but managed a small jump against the dollar in the afternoon that pushed it into the upper half of the 1.27-1.28 trading band. This dollar softness pushed euro-dollar higher above 1.14 and continued overnight, seeing sterling-dollar break 1.28 and euro-dollar regain 1.15 to hit their highest levels since 9 August.  
 
The pound continued to hold clear of its recent sub-1.66 low against the Canadian dollar. The BoC’s Wilkins focused on financial stability in her comments yesterday. The Fed’s Bostic was upbeat on the economy, saying that it no longer needs the same level of stimulus, but was cautious on trade risks and sees only one more hike this year. The Fed’s median view is for two more hikes.
 
The RBA meeting minutes and a speech from RBA Governor Lower contained little new. Lowe said rates will move higher “at some point”.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1145 1.1294 1.1073 1.96%
GBP/USD 1.2832 1.3213 1.2666 4.14%
EUR/USD 1.1514 1.1746 1.1301 3.79%
GBP/AUD 1.7454 1.7825 1.7284 3.04%
GBP/NZD 1.9244 1.9457 1.9077 1.95%
GBP/CAD 1.6722 1.7305 1.6596 4.10%

Today's Market Highlights

Another quiet calendar day could see exchange rates remain around familiar levels. A positive Public Sector Net Borrowing figure (09:30 BST) could offer the pound some support amidst a light data offering but may overall have a limited market impact.
 
The calendar picks up tomorrow with the release of the Fed’s meeting minutes. Geopolitical developments remain key; Brexit negotiations continue later in the week, which could renew pressure on the pound, depending on the resulting headlines.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:30am GBP Public Sector Net Borrowing (Jul) £-2.30B £4.53M
NZD Global Dairy Trade Price Index 0%
11:45pm NZD Retail Sales QoQ (Q2) 0.4% 0.1%
11:45pm NZD Core Retail Sales QoQ (Q2) 0.8% 0.6%
4:10am AUD RBA Assist Gov Debelle Speaks

Caxton