09/09/2024
Written by: Ian Morley
Summary:
Over the weekend, the USD saw a modest rise, following another sell-off on Friday, which pushed GBPUSD to its highest level in 12 months. The GBP performed strongly overall, with GBPEUR reaching near 2-year highs.
Speeches:
Market Insight:
The weekend’s events are likely to strengthen the probability of Trump being re-elected in the US elections later this year. Consequently, we may see the USD maintain its early gains. However, it’s important to note that the markets have already largely priced in a Trump victory, which explains the limited gains for the greenback thus far.
As the week progresses, the focus will likely return to fundamentals, with the USD influenced by tomorrow’s retail sales figures and Fed Chair Powell’s speech later today. This week’s primary focus will be on the GBP, with the release of CPI numbers on Wednesday and job figures on Thursday. Market momentum continues to favour the GBP, especially following the hawkish comments made by Chief Economist Huw Pill. Therefore, unless there is a sharper-than-expected decline in CPI (particularly services CPI) and wages, the GBP is likely to remain strong. Final CPI numbers from Europe are also due on Wednesday for June, followed by the ECB rate decision on Thursday. While no change is expected, attention will be on whether Christine Lagarde hints at a rate cut in September.