GBP

Sterling is trading up 0.2% from Fridays close against the dollar, but largely unchanged against the euro in early trading. The pound gained around half a cent on Friday against the greenback after US Federal Reserve Bank Chairman Jerome Powell, speaking at the annual Jackson Hole symposium, offered no signal on when the central bank plans to cut its bond buying scheme saying it could be “this year”. However, any further gains for sterling may be capped amid concerns related to persistent Brexit tensions with the EU, disruptions in the supply chain and an increase in daily Covid cases.

EUR

The Euro also gained against the dollar following Fed Chairman Powell’s comments. Inflation data for the eurozone due for release later this morning will be closely monitored after European Central Bank Governing Council member Robert Holzmann said in an interview with German television that he expects inflation in Europe to continue dropping this year, as well as next year. This added to recent comments by the Bank of France head Villroy de Galhou who also rejected inflation fears.

USD

The US dollar index fell to a near week low after US 10 year treasury bonds dropped for the third consecutive day following Powell’s Jackson Hole speech. The greenback’s direction today is likely to be driven by month end flows from various businesses for their import and export transactions and various economic data released later today.

Economic Calendar

10.00 am EUR Consumer Price Index
2.00 pm US housing price Index
2.45 pm US Chicago Purchasing Managers index
3.00 pm US Consumer Confidence