09/09/2024
Written by: Ian Morley
Summary:
On Friday, Federal Reserve Chair Powell signalled an upcoming rate cut in September, prompting the US dollar to weaken further. In response, GBP/USD climbed to its highest levels since early 2022, and EUR/USD reached a new high for July 2023.
The market largely anticipates a 0.25% rate cut, with upcoming job data on September 6th being crucial in determining if a more significant 0.5% cut could be on the table.
Outlook:
On Wednesday, Nvidia’s earnings report will be closely watched to assess market sentiment. Thursday brings the second estimate of Q2 GDP growth from the US, and on Friday, core PCE inflation figures from the US and August inflation data from Europe are due.
At the start of the week, the British pound appears well-supported, benefiting from continued market optimism. The outlook for GBP, especially against the EUR and USD, hinges on risk appetite sustaining its upward momentum toward July’s highs. As we approach the end of the month, the performance of the US dollar will play a critical role.