USD reached a weekly high after PCE, personal consumption expenditure, rose in July. Figures came in at 3.7% year-on-year, higher than its forecast of 3.6%. While month-on-month also noticed stronger than expected numbers by coming in at 0.2%. Markets are currently pricing in roughly a 60% chance that the Federal Reserve will hike rates next months and where the USD partially has recovered from. US inflation still elevated, with treasury yields still volatile for swings and tensions in trade between the US and Canada leading to uncertainty on markets. Jackson Hole commencing too, markets will watch carefully when Kevin Warsh take the podium looking for signals on timings from the Federal Reserve.
European Central Bank member Schnabel warned markets that borrowing costs must rise further, mentioning that inflation is unlikely to cool down towards their target rate over a medium timeframe. What might come as a relief is recent falls of oil prices, which could help to cool inflation prices across Europe. German treasury yields reacted and bounced back from its two week low.
In today’s afternoon session markets will keep an eye on US ongoing jobs market reports. Initial jobless claims is forecasted to increase to 208k, which would lift it up from its latest reading of 206k.
GBP/EUR 1.1645 GBP/USD 1.3671 GBP/AED 4.9863
GBP/AUD 1.8897 GBP/CHF 1.0934 GBP/CAD 1.8842
GBP/NZD 2.2836 EUR/USD 1.1640 GBP/ZAR 21.6774