09/09/2024
Written by: Ian Morley
Summary:
The USD extended Monday’s gains following an unexpected rise in retail sales for June. However, the gains were marginal, highlighting the negative market sentiment towards the USD, influenced by the Federal Reserve’s dovish stance on rate policy.
Speeches:
Market Insight:
This morning’s data revealed stronger than anticipated inflation in June, with service sector prices remaining persistently high. Although headline inflation has now reached the target, today’s data casts doubt on the possibility of a rate cut in August, with the likelihood reduced to 36%. A September rate cut is now projected at 78%. The GBP received a slight boost following the release of these figures, as we await tomorrow’s job numbers.
Final CPI numbers from Europe are not expected to differ significantly from previous estimates, resulting in minimal movement for the EUR. The remainder of the day is anticipated to be quiet, with the release of the Fed Beige Book in the evening, which may indicate strains in the job market. This could contribute to a dovish outlook on rate policy, likely impacting the USD negatively.