18/08/2021 - DAILY MARKET REPORT


  • This morning, GBP and EUR are trading lower against the dollar as investors continue to be risk-averse. As is usually the case in times of uncertainty, the dollar is driving the market and ignoring the domestic news even when it is good, such as yesterday’s employment figures from the UK. Apart from the geopolitical fallout from the withdrawal of US troops from Afghanistan, the dollar is also being helped by comments from a senior Federal Reserve official, Eric Rosengren. In an interview with the Financial Times, he called for speedy action from the Fed to wind down its stimulus. GBPEUR is also suffering as fears over the delta variant of Covid re-emerged and partly as a by-product of the strong dollar. If you are looking to sell USD buy EUR we suggest a quick chat with your account manager to discuss your options.

  • A busy start to the day saw a host of inflation readings from the UK, which mostly came in slightly lower than expected, with a headline Consumer Price Index dipping down from last month to show an annual rise of 2%. These figures may put some further pressure on sterling ahead of what promises to be an interesting day.

  • Following hot on the heels of the UK inflation data, we will study the latest Consumer Price Index from the Eurozone published at 10.00 this morning. Although these may give some short-term direction to the euro, the market is more than likely to tread water ahead of the release of the minutes from the Federal Open Market Committee’s July meeting. After Eric Rosengren’s hawkish comments yesterday joined those of over officials of the Federal Reserve, we will be studying these minutes to see the depth of this sentiment.

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