GBP edges up ahead of busy UK data week – Scotiabank

FXStreet Insights Team FXStreet

The Pound Sterling (GBP) gained slightly against the US Dollar (USD) as markets prepare for a heavy UK data calendar ahead of Thursday’s Bank of England meeting. With jobs, preliminary PMIs, and CPI releases scheduled this week, the widely expected 25bps rate cut to 3.75% leaves room for a neutral or hawkish surprise, while market positioning continues to price in significant easing risks, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets brace for BoE rate decision on Thursday

"The pound is up a fractional 0.1% vs. the USD and a relative performer against most of the G10 currencies as we enter Monday’s NA session."

"The domestic calendar is heavy leading into Thursday’s BoE with jobs and preliminary PMI’s scheduled for Tuesday, CPI on Wednesday, and retail sales following the central bank decision on Friday. A 25bpt cut — to 3.75%— is widely anticipated and risk lies with the statement tone (there will be no fresh forecasts)."

"We see scope for neutral/hawkish surprise in the aftermath of the latest budget, and note that markets are pricing considerable easing into the short-term rates market with options still pricing a sizeable premium for protection against GBP weakness."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.