07/11/2024
Summary:
End-of-month financial flows continued to exert pressure on the euro, leading to its decline and a corresponding rise in the US dollar throughout the day. The pound-to-euro exchange rate steadily climbed, reaching new one-month highs.
Concerns surrounding Nvidia’s quarterly financial results caused a dip in US equities during the afternoon, which broadly weakened the pound, except against the euro and the Danish krone. Although Nvidia’s results exceeded analysts’ predictions, they did not meet some of the more optimistic expectations.
The initial market response saw equities continue to decline, but signs of recovery emerged early this morning.
Outlook:
The US GDP and core PCE figures are second estimates and may not significantly impact the markets, so attention is likely to shift towards jobless claims data.
Federal Reserve Chair Powell expressed concerns about the rapid weakening of the US job market, suggesting that jobless claims may exceed expectations, potentially further weakening the US dollar.
National CPI figures across Europe were released this morning, with Spanish data indicating a third consecutive month of cooling inflation, which led to early euro weakness. We are awaiting Germany’s CPI figures this evening and EU-wide data tomorrow. Regarding the pound-to-euro exchange rate, it seems poised to challenge the highs observed in July.