Currency news

Good mood punishes USD

Head of FX Analysis at Equals Money
-
3
min read
Publish date
27/09/24
    • USD gets hit on higher equities
    • Markets ramp up bets for ECB cut in October


    Yesterday's currency recap

    There were some positive news stateside with GDP numbers (third reading) for Q2 coming in higher than expected and jobless claims coming in below original projections.

    The good news led to initial USD gains, however when US equities began trading, the feel-good factor buoyed stocks causing a weaker USD and pushing GBPUSD and EURUSD close to the highs observed on Wednesday.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.38% 1.9453
    GBPCAD 0.54% 1.8063
    GBPCHF 0.22% 1.1355
    GBPDKK 0.28% 8.9506
    GBPEUR 0.28% 1.2003
    GBPJPY 0.67% 194.1190
    GBPNOK 0.22% 14.1172
    GBPNZD -0.22% 2.1212
    GBPSEK 0.00% 13.5698
    GBPUSD 0.65% 1.3410


    *Daily move - against
    G10 rates at 7:30am, 27.09.24

    ** Indicative rates - interbank rates at 7:30am, 27.09.24

    Key data points

    Currency Event Period Consensus Previous
    USD Core PCE MoM Aug 0.20% 0.20%
    USD Core PCE YoY Aug 2.70% 2.60%

    Upcoming speeches

    • EUR: ECB Nagel, Lane, Rehn
    • USD: Bowman

    What we think

    So far this morning, we are seeing a weaker JPY as Japan's Prime Minister election went to a run-off vote. Japan’s new PM is set to be either Sanai Takaichi or Shigeru Ishiba. The country is edging closer to electing its first female PM (Takaichi) - a known advocate of monetary easing. This dip in JPY is driving a surge into USD, resulting in both GBPUSD and EURUSD opening slightly below yesterday's peaks.

    French CPI numbers have come in lower than expected this morning, strengthening  wagers that the ECB will have to act in October and cut rates again.

    German CPI number are out on Monday and eurozone-wide numbers on Tuesday. EUR is lower across the board.

    Today's focus falls on the core PCE inflation number from the US. For USD to end the week on a high note, we need to see a higher than expected core PCE inflation figure to ease off bets for another 50bps cut by the Fed in November.

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