gbp 10

Pound Rallies on Hawkish BoE Outlook, US Dollar Bolstered by Strong Payroll Print

The Pound trended broadly higher this week, strengthening on the back some surprisingly hawkish forward guidance from the Bank of England (BoE), following its latest policy meeting. 

At the same time, the US Dollar was also able to appreciate this week, with the majority of the currency’s gains coming in the wake of stronger-than-expected payroll figures. 

Pound Surges on Hawkish BoE 

GBP/EUR – Up one cent on the week’s opening levels 

GBP/USD – Unchanged on the week’s opening levels 

The Pound trended broadly higher through the first half of the session, as some upbeat coronavirus statistics helped to underpin economic optimism in the UK.  

Sterling then consolidated these gains in the wake of the Bank of England’s (BoE) latest policy meeting, after the bank dropped hints regarding the possibility of tightening its monetary policy. 

Looking ahead, the primary focus for GBP investors next week will undoubtedly be the publication of the UK’s latest GDP figures, with a strong rebound in second quarter growth likely to reflect well on the Pound. 

Euro Stumbles on Underwhelming Eurozone Data 

EUR/GBP – Down one pence on the week’s opening levels 

EUR/USD – Down one cent on the week’s opening levels 

The Euro opened this week on positive footing, rallying on the back of some upbeat Germany retail sales figures and a stronger-than-expected manufacturing PMI.  

However, the single currency was then placed on the defensive in the latter half of the week, in response to renewed demand for the US Dollar as well as some underwhelming EUR data releases.  

Turning to next week, the focus for EUR investors is likely to be on the latest ZEW surveys from Germany. Will another deterioration in economic sentiment drag the Euro lower at the start of the session? 

US Dollar Bolstered by Upbeat Payroll Figures 

USD/GBP – Unchanged on the week’s opening levels  

USD/EUR – Unchanged on the week’s opening levels  

The US Dollar struggled to find any lasting support through the first half of this week, in response to some mixed US economic releases as well as fluctuating market risk appetite.  

The US Dollar was then able to sustain some notable gains in the second half of the session on the back of some hawkish comments from a Federal Reserve policymaker, as well as a stronger-than-expected US non-farm payroll print. 

Top of the agenda next week will be the publication of the latest US consumer price index. This could send the US Dollar sharply higher if inflation in the US continued to climb rapidly last month. 

Australian Dollar Soars Following RBA’s Hawkish Surprise 

AUD/GBP – Up one pence the week’s opening levels 

AUD/USD – Unchanged on the week’s opening levels 

The Australian Dollar trended broadly higher this week, rallying on the back of a surprisingly hawkish tilt from the Reserve Bank of Australia’s (RBA) following its latest policy meeting.  

In spite of Australia’s current coronavirus resurgence, the RBA signalled that it still plans to begin tapering its stimulus programme in July, the announcement of which lit a fire under the Australian Dollar. 

In the spotlight for AUD investors next week will be the publication of Australia’s latest jobs report. Will a rise in unemployment last month unravel some of the ‘Aussie’s gains? 

Key Data  

Aug 10 AUD Consumer Confidence (Aug) 

Aug 10 EUR German ZEW Economic Sentiment (Aug) 

Aug 11 AUD Wage Price Index (Q2) 

Aug 11 EUR German Inflation Rate (Jul)  

Aug 11 USD Inflation Rate (Jul)  

Aug 12 AUD Unemployment Rate (Jul) 

Aug 12 GBP GDP (Q2) 

Aug 12 GBP Business Investment (Q2) 

Aug 12 GBP Industrial Production (Jun) 

Aug 12 EUR Industrial Production (Jun) 

Aug 12 USD Initial Jobless Claims (7/Aug) 

Aug 13 USD Consumer Sentiment (Aug)