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Cautious market ahead of Jackson Hole Symposium

21st August 2017 Market Update

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?? GBP – The pound continued its negative trend last week with inflation disappointing dampening chances of an interest rate rise.

Unemployment rate and retail sales both beat expectations, causing the pound to move back to similar levels to what we saw before the inflation news. However, as has been the case recently the pound struggled to maintain its position and fell even lower by the end of the week.

?? EUR – A less volatile week for the euro. 2nd quarter growth figures failed to cause any major stir, with the single-bloc currency finishing the week overall unchanged.

?? USD – The dollar finished the week as the biggest gainer, halting its previous 5 week decline.

The only notable news/data was the FOMC minutes which provided no indication of when the next interest rate rise would be.

 

 

Key Announcements

?? – 23/08/2017
PMI services expected to remain the same.
PMI manufacturing. A slight drop is expected.

?? – 23/08/2017
PMI services. Expected to fall slightly.
PMI manufacturing. Expected to fall slightly.

25/08/2017
Durable goods orders. Expected to fall quite significantly.

?? – 24/08/2017
GDP. Expected to remain at three year low.

 

Our View: With the pound looking like it has no way out of this slump, downward pressure looks likely to remain on the currency. With the euro in a similar boat, dollar strength looks the most likely to strengthen but the Jackson Hole symposium later this week could throw a few spanners in the works, depending on what statements are made by Fed members and ECB President Mario Draghi.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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