EUR/USD approaches 2024 high ahead of Jackson Hole Economic Symposium
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Daily Currency Update
Friday's release of July's UK Retail Sales figures revealed a positive rebound with a 0.5% month-on-month growth, recovering from June's weather-related decline. This was the final piece in a series of top-tier UK data releases, indicating that the economy is holding up reasonably well despite various geopolitical challenges. Earlier in the week, UK inflation was reported to have risen slightly less than expected, reaching 2.2% year-on-year. This lower-than-forecast inflation increases the likelihood of another interest rate cut at the Bank of England's September 19th meeting. Despite these developments, broad dollar weakness has driven GBP/USD up from around 1.28 after the CPI inflation data to approximately 1.2960 this morning. Meanwhile, GBP/EUR has climbed back to 1.1740, aided by the return of calm to the stock market following the turbulence seen earlier in the month.Key Movers
This week’s key event is the annual Jackson Hole Economic Symposium, hosted by the Kansas City Federal Reserve. Central bankers, politicians, and senior financial figures will convene for the three-day conference to discuss the global economic outlook. All eyes will be on Fed Chairman Jay Powell’s speech, especially with the anticipated first interest rate cut since 2020 likely to be announced at the Fed’s September 18th policy meeting. This will also be Powell’s first major address since the global stock market turmoil earlier this month, where concerns about the U.S. economy triggered significant losses across global exchanges.A few weeks ago, a 50bp cut seemed possible, but now a 25bp reduction appears to be the consensus forecast. Regardless, the easing of market conditions and confirmation of an upcoming rate cut have led to a broad decline in the USD at the start of this week. EUR/USD has regained the 1.10 level, currently hovering around 1.1045, which has been a resistance point for much of the year.
The only notable event today is a speech by Federal Reserve policymaker Christopher Waller, scheduled for 2:15 PM in Washington.
Expected Ranges
- GBP/USD: 1.2880 - 1.3000 ▲
- GBP/EUR: 1.1705 - 1.1790 ▲
- GBP/AUD: 1.9315 - 1.9455 ▼
- EUR/USD: 1.0990 - 1.1100 ▲