Marketwatch EU & UK

Daily Insights
August 17, 2023

The FOMC released minutes of its 25-26 July policy meeting yesterday which showed that officials are cautiously optimistic about achieving a soft landing. The minutes showed that “a couple” of participants favored leaving the key fed funds rate unchanged, whilst “a number” believed that risks to achieving the central bank’s dual mandate is increasingly two sided, and the Fed should be cautious to avoid overtightening. Many in the market now believe that the Fed is close to the end of its hiking cycle and will pause when rate setters next meet on 19-20 September. The attention now shifts to next week’s Jackson Hole Economic Symposium, when analysts will search for clues on just what the Fed will do to interest rates at its three remaining policy meetings this year.

The US dollar remains solid against most of its G10 peers, with the dollar index gaining for a sixth day as EURUSD slips below 1.09. GBPUSD rallied after yesterday’s UK CPI release, with cable trading briefly above 1.2760 on a hawkish BoE outlook. Tomorrow’s UK Retail Sales report may give us additional clues on the state of the economy, with sales likely to have slipped after unseasonably wet weather hit summer clothing and outdoor spending.

News out of China continues to impact risk appetite with the onshore yuan extending its recent fall to drop near to its weakest level since 2007 amid weak growth prospects and higher US treasury yields which are further widening the US-China yield gap.

Economic Calendar

AUD - Employment Change
AUD - Unemployment Rate
NZD - RBNZ Statement of Intent
JPY - Tertiary Industry Activity m/m
CNY - Foreign Direct Investment ytd/y
EUR - Trade Balance
EUR - EU Economic Forecasts
CAD - Foreign Securities Purchases
USD - Unemployment Claims
USD - Philly Fed Manufacturing Index
USD - CB Leading Index m/m
USD - Mortgage Delinquencies
USD - Natural Gas Storage
GBP - GfK Consumer Confidence
JPY - National Core CPI y/y

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85457 0.85404
gbp/usd 1.27277 1.27109
gbp/aud 1.99697 1.98384
gbp/nzd 2.15321 2.14521
usd/jpy 146.556 146.286
eur/usd 1.08748 1.08614
gbp/jpy 186.409 186.097
eur/cnh 7.98549 7.96713
usd/cnh 7.34961 7.33124
Equities and Commodities
Nasdaq 100 13474.63
DOW 34765.74
S&P 500 4406.03
WTI 79.21
GOLD 1893.7

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Simon Walker


Simon Walker is head of the GPS Capital Markets trade desk in our London office where he is responsible for covering market risk in European hours. He has over 25 years’ experience in foreign exchange, working in both sales and trading.