USD lost even more ground yesterday following downward revisions to US payroll numbers. A dovish Fed meeting showed that some members of the Fed considered rate cuts in July. GBPUSD tested the highs last seen in July 2023 and EURUSD hit 13-month highs.
*Daily move - against G10 rates at 7:30am, 22.08.24
** Indicative rates - interbank rates at 7:30am, 22.08.24
Over the course of last night, USD has recovered some of the ground lost as focus now falls onto Fed Powell's speech at Jackson Hole tomorrow. Before then, we have August PMI numbers from Europe, UK and the US, as well as the weekly jobless claims numbers stateside. For EUR, focus will also fall on the Q2 negotiated wage numbers and the implications on future interest rate movements from Europe. Sticky wages and markets may indicate less rate cuts than currently expected, which will benefit the EUR. Given the respective highs on GBPUSD and EURUSD, there has been a high level of interest across the client base in taking advantage of current levels and evaluating hedging requirements for the remainder of the year. The Jackson Hole symposium tomorrow remains a risk for USD.
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