USD Softens; UK Data Week Wraps Up

The USD softened overnight. UK Retail Sales and US housing data are in focus today.

Previous Day's Market Highlights

Sterling-dollar fell to a new low since June 2017 yesterday morning as the dollar continued to firm. Euro-dollar tested lows around 1.13. Headline UK CPI rose to 2.5% as projected, while core inflation stayed steady at 1.9%. The data had a limited impact on the pound, which weakened in the morning session. In the afternoon, the Turkish lira rallied after Qatar pledged to invest $15B in Turkey.
 
The Aussie strengthened overnight on a dip in the Unemployment Rate and reports that trade talks between China and the US would continue later this month. The US dollar softened against both the euro and the pound following the reports. As a result, sterling-dollar regained 1.27 and euro-dollar made gains towards 1.14.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1183 1.1294 1.1073 1.96%
GBP/USD 1.2721 1.3213 1.2666 4.14%
EUR/USD 1.1375 1.1750 1.1301 3.82%
GBP/AUD 1.7499 1.7825 1.7284 3.04%
GBP/NZD 1.9321 1.9457 1.9077 1.95%
GBP/CAD 1.6696 1.7347 1.6596 4.33%

Today's Market Highlights

A gain in Retail Sales could offer the pound some support this morning (09:30 BST), but overall sterling is likely to remain under relative pressure as Brexit uncertainties remain in play. A slightly higher trade balance may have a limited impact on the euro (10:00).
 
In the afternoon, US housing data are in focus. Increases in both Housing Starts and Building Permits in July may give the dollar some additional support, although geopolitics will likely remain the greenback’s key driver as markets continue to watch the latest trade and Turkey headlines.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:30am GBP Retail Sales MoM (Jul) 0.2% -0.5%
9:30am GBP Core Retail Sales MoM (Jul) 0.1% -0.5%
9:30am GBP Retail Sales YoY (Jul) 3.0% 2.9%
9:30am GBP Core Retail Sales YoY (Jul) 2.8% 3.0%
10:00am EUR Trade Balance s.a. (Jun) €17.0B €16.9B
1:30pm USD Housing Starts MoM (Jul) 1.260M 1.173M
1:30pm USD Building Permits MoM (Jul) 1.310M 1.273M
1:30pm USD Initial Jobless Claims (6 Aug) 215K 213K
1:30pm USD Philadelphia Fed Manufacturing Survey (Aug) 22.0 25.7
12:30am AUD RBA Governor Philip Lowe Speaks

Caxton