Markets braced for Fed Chair Powell

Yesterday's currency recap

USD gained across the day, following PMI numbers that showed better economic activity in both the services and manufacturing sectors. This caused treasury yields to rise and markets to revise rate cut pricing for this year, from 53bp worth of cuts down to 48bp.

EU PMIs also showed expansion in the manufacturing and services sector, which caused EUR gains initially but this did not last. UK PMIs came in better than expected but manufacturing remained in contraction territory.

Today's GBP rates

Key data points

What we think

Today all eyes are on Fed Powell's speech at 4pm at Jackson Hole, where markets will be looking for clues about future Fed policy. Powell will likely tread a cautious, data-dependent path, signalling openness to rate cuts later this year without committing in September. He'll likely emphasise ongoing inflation risks and reiterate independence amidst political noise. GBPUSD and EURUSD currently sitting at support levels with markets poised for the potential for some hawkish noise from Powell.

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