Currency news

Dollar set for rebound?

Head of FX Analysis at Equals Money
-
3
min read
Publish date
30/05/24
    • GBPEUR edges off August 2022
    • USD price actions suggesting more gains to come?


    Yesterday's currency recap

    USD demand kicked in yesterday as treasury yields climbed ahead of the core PCE inflation numbers on Friday. Earlier in the day the EUR got hit as regional German inflation numbers came in lower than a month ago, seeing GBPEUR briefly hit the highest since August 2022.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.07% 1.9205
    GBPCAD 0.05% 1.7425
    GBPCHF -0.30% 1.1608
    GBPDKK -0.01% 8.7691
    GBPEUR -0.01% 1.1755
    GBPJPY -0.14% 200.2920
    GBPNOK 0.12% 13.4314
    GBPNZD -0.04% 2.0773
    GBPSEK 0.30% 13.5355
    GBPUSD -0.37% 1.2713


    **Daily move - against G10 rates at 7:30am, 30.05.24

    ** Indicative rates - interbank rates at 7:30am, 30.05.24

    Key data points

    Currency Event Period Consensus Previous
    USD GDP QoQ Q1 2nd 1.30% 1.60%
    USD Personal Consumption Q1 2nd 2.20% 2.50%
    USD GDP Price Index Q1 2nd 3.10% 3.10%
    USD Core PCE Index Q1 2nd 3.70% 3.70%

    Upcoming speeches

    • None today.

    What we think

    Second Q1 estimates for US GDP, expected to be downgraded to 1.3%, growth from 1.6%, and core PCE, expected to remain at 3.7%, will be released this afternoon. Price action over the last 3 days on USD has been interesting, with both GBPUSD and EURUSD retracing off recent highs quite aggressively. Either this is the markets booking profits on the recent gains on the pairs, or markets could be expecting an upside surprise in tomorrow’s core PCE numbers.

    Chart of the day

    We suggested yesterday that perhaps GBP was overbought, relatively speaking, and today we note recent price action suggests that perhaps USD could be due for a rebound. There has been a noticeable support line on the USD index throughout this year, where the currency has rebounded 4 times off this line before going onto make gains. Could tomorrow's core PCE numbers extend this trend?

    30052024 cotd
    Source: Bloomberg Finance L.P.

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

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