Market Report : 04.08.2024

Published: 04/09/2024 By ECAP

The British Pound is moving without a clear trajectory this morning amid a lack of fresh UK data. In fact, with data in short supply, deteriorating market sentiment deters investor interest in the increasingly risk-sensitive pound. However, as markets continue to price in a less aggressive policy-easing cycle by the BoE, pared back interest rate cut bets may serve to keep Sterling afloat amid thin trading conditions.

The Euro faces mounting pressure as escalating political polarization in Europe, particularly in Germany, raises alarms over the currency's stability. In fact, Macquarie analysts note that the rise of extremist parties in Germany mirrors the political upheaval seen in France’s June parliamentary elections. Ultimately, this political uncertainty is not just a domestic issue but also a broader challenge for the euro area.

The U.S. Dollar reached a two-week peak against the euro yesterday as investors prepare for a week filled with crucial data, including the U.S. payrolls report due on Friday. This jobs report is expected to have a major impact on the Federal Reserve's decision, which is due September 18. The upcoming data follows comments from Fed Chair Jerome Powell last month, signalling the onset of interest rate reductions due to concerns about a weakening labour market.

Data supplied by GC Partners