Currency news

Dollar trades 2-month highs ahead of key US inflation data

Chief Market Strategist at Equals Money
-
3
min read
Publish date
28/06/24
    • GBP: Bank of England says that UK household and businesses are coping with higher rates
    • EUR: French election concerns
    • USD: Trump/Biden debate exposes Biden’s frailty


    Yesterday's currency recap

    The US dollar rose to a fresh 2-month high after a shambolic showing from US President Biden in the first Presidential debate. Once gain Biden’s frailty was exposed, often stumbling over his words, and at one stage completely losing his train of thought. Trump performed well, and the $ rallied as he doubled down on imposing trade tariffs, saying this will decrease the trade deficit and will not increase inflation. Elsewhere US and EU macro data came in pretty much in line with expectations, will all eyes now firmly on today’s Core PCE numbers (Fed’s preferred measure of inflation).

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.01% 1.9064
    GBPCAD 0.05% 1.7335
    GBPCHF 0.05% 1.1357
    GBPDKK 0.01% 8.8090
    GBPEUR 0.21% 1.1812
    GBPJPY 0.26% 203.2100
    GBPNOK 0.25% 13.4800
    GBPNZD 0.26% 2.0930
    GBPSEK 0.25% 13.4450
    GBPUSD -0.07% 1.2628


    *Daily move - against
    G10 rates at 7:30am, 28.06.24

    ** Indicative rates - interbank rates at 7:30am, 28.06.24

    Key data points

    Currency Event Period Consensus Previous
    EUR German Retail Sales May (YoY) N/A -0.60%
    GBP GDP Q1 (YoY) Final 0.20% -0.20%
    EUR German Unemployment Jun 15,000 25,000
    USD Core PCE May 2.60% 2.80%
    USD PCE Prices QoQ (Q1) 3.30% 1.80%
    USD Chicago PMI Jun 39.7 35.4
    USD Michigan Consumer Sentiment Jun 65.8 69.1

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    What we think

    Given the recent exceptionally low volatility across major currencies, today’s US inflation data has gained in significance, so we expect outsized FX moves were the numbers to come in out of line with forecasts. Elsewhere politics could well become a major catalyst for markets, with the upcoming first round of French Election voting due Sunday, and the UK election slated for next Thursday.

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    About the author
    Lawrence Kaplin
    Profile
    Chief Market Strategist at Equals Money

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