Currency markets did see some swings overnight but you could not be faulted for not noticing as the dollar opens today’s trading in very familiar ranges against most of its counterparts.
Overview
An exception would be the Swedish krona that slipped nearly half a percent after the country’s unemployment rate rose to a three-year high.
Yesterday saw the release of the minutes of the Fed’s latest meeting. While it was billed as the biggest risk event of the day, it turned into a non-event with traders instead turning their attention the upcoming symposium in Jackson Hole, WY. Fed Chair Jay Powell will speak tomorrow and we expect him to basically confirm a rate cut in September. The question becomes whether he will change his recent tune and allude to a series of more rate cuts.
Markit service and manufacturing PMI will cross the wires at 9:45 a.m. today.
What to Watch Today…
- Markit PMI at 9:45 a.m.
Complete Economic Calendar can be found here.
EUR
The Euro jumped overnight on the back of better-than-forecast manufacturing data out of Germany and France. However, the common currency then quickly gave back its gains and EUR/USD opened this morning’s trading in all too familiar ranges. The reversal probably came as traders realized that data was still fairly bleak for Europe’s largest economy. While German manufacturing beat estimates, the print still represents a contraction for the 8th straight month. German service PMI was solid, however. France reported growth in both services and manufacturing.
GBP
The sterling was under some pressure overnight but is gaining significantly in early trading. A day after meeting with German Chancellor Merkel, U.K. Prime Minister is set to meet with French President Emmanuel Macron. Macros has reportedly said he was “confident” they could find “something intelligent” on Brexit talks. Merkel added to the tepid optimism saying there is still time to reach a deal. It is out suspension that the sterling’s pop higher will be short-lived.
