Currency news

US Jobs and ECB meeting highlights this week

Head of FX Analysis at Equals Money
-
3
min read
Publish date
03/06/24
    • US growth gets downgraded
    • Could be a volatile end to the month


    Currency recap

    A surprise uptick in eurozone CPI caused gains on EUR, casting some doubts over future rate cuts across this year. GBPEUR traded lower off recent highs, and EURUSD climbed up to the May highs. USD weakened after personal spending numbers came in lower than expected. The core PCE numbers came inline, doing very little to move rate expectations. GBP followed risk sentiment and with equities declining stateside, we saw general weakness on the currency. GDP numbers from Canada came in lower, causing a sharp sell off on CAD just after the release of the numbers.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.10% 1.9178
    GBPCAD -0.24% 1.7377
    GBPCHF -0.03% 1.1498
    GBPDKK -0.15% 8.7540
    GBPEUR -0.15% 1.1736
    GBPJPY 0.25% 200.1690
    GBPNOK -0.37% 13.3814
    GBPNZD -0.35% 2.0749
    GBPSEK -0.63% 13.4060
    GBPUSD 0.00% 1.2734

    *Daily move - against G10 rates at 7:30am, 03.06.24

    ** Indicative rates - interbank rates at 7:30am, 03.06.24

    Key data points

    Currency Event Period Consensus Previous
    EUR Manufacturing PMI May Final 47.40 47.40
    GBP Manufacturing PMI May Final 51.30 51.30
    USD Manufacturing PMI May Final 50.90 50.90
    USD ISM Manufacturing PMI May 49.60 49.20

    Upcoming speeches

    • None today.

    What we think

    So expecting a quiet start to the week, with just the release of final manufacturing PMI numbers today. Focus for the rest of the week falls on US job numbers with the release of the JOLTs job openings, ADP and nonfarm payrolls (NFPs). Last month’s readings came in lower than expected, triggering a month long sell-off in USD throughout May. Anything to suggest the job market is weakening will be welcome news for the Fed, and will likely bring forward when the Fed are expected to cut.

    The other major event will be the ECB meeting. Markets are expecting a 0.25% rate cut by the ECB, and this is largely priced in. Considering May's inflation numbers coming in higher and Q1 wage growth coming in higher, we could well see a hawkish cut by the Bank which should bode well for the EUR. The Bank of Canada are also expected to take similar action this week.

    For GBP the only major data points will be the DMP inflation expectations, which will have implications on rate expectations.

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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