USD continued to sell off over the course of yesterday's trading session, as market sentiment remained buoyant going into Friday’s Jackson Hole meeting. Market odds of a 0.50% rate cut in September eased to only 10% probability, now taking GBPUSD close to July’s highs, and EURUSD hit the highest levels since the end of Dec 2023.
*Daily move - against G10 rates at 7:30am, 20.08.24
** Indicative rates - interbank rates at 7:30am, 20.08.24
Just the final CPI numbers from the EU on the agenda, which shouldn’t create too much volatility. So again, we expect risk sentiment to continue to drive FX until we get towards the end of the week with the Jackson Hole meeting. USD is still trading relatively weaker with the index near the lows of this year given markets have discounted the frequency of rate cuts this year.
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