Calm after the Fed’s storm

USD

With the market still digesting the Fed’s cut last week, USD is lower across the board. The US Dollar index which measures the strength of the currency against its major peers is close to its lowest level since July 2023. With such significant news still rippling through the market, mixed PMI results yesterday did little to move the currency in any direction. Manufacturing PMI was softer than expected, coming in at 47, whilst Services PMI came in slightly higher than expected at 55.4. With no significant data releases due today, the more volatile sessions for USD are likely to come later in the week. On Thursday we will have GDP and employment data with Friday giving us an update on inflation through the PCE Price Index release.

EUR

Whilst the news overnight of a fresh stimulus package from China may prove to be positive long-term for the Eurozone, the market’s attention for the Euro today will be the German IFO data. The Euro, like most of its peers, has held on to its gains against the USD following the surprise 50bps cut last week. The more impactful data this week will come in the form of French and Spanish inflation data on Friday.

GBP

Sterling has held its ground against the USD and EUR, trading at highs last seen in Q2 2022. The move over the course of the last 2 weeks is representative of 2% higher against the USD and over 3% against the EUR. Slightly softer than expected PMI data yesterday has done nothing to take the wind out of the pound’s sails. There are no significant UK data releases through to the end of the week.

CAD

The BoC had little impact on CAD last week. With a very light economic calendar for the Loonie this week, the market will need to wait for the GDP data release on Friday to fuel any moves. The figure is expected to come in at 0.1% MoM, up from June’s reading of 0%.

Disclaimer

This information has been prepared by Monex Europe Holdings Limited, part of Monex S.A.P.I. de C.V. (“Monex”). The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. All entities in the “Monex” group of companies are regulated for different products and services within the jurisdictions in which they operate. Details of the different entities can be found here. Details of the respective entities’ regulated status and available products and services can then be found on the relevant links to the individual jurisdictions’ website.