Dollar Gains On Risk Aversion
It was a muted start to the week yesterday with the main FX pairs confined to narrow ranges. Meanwhile, a good deal of data has already been released this morning, mainly comprising UK labour market data. The key facts from this release include the unemployment rate, which edged lower to 4.7% from 4.8% and payrolls rising by greater than 100k for the fourth month on the trot. So far though, it hasn’t impacted sterling during the opening session.
In level terms, GBP/EUR gets underway at just above the 1.1765 mark. EUR/USD continues to trade in the top half of $1.17-1.18 and GBP/USD $1.38-1.39 – although it has just dropped down into the lower end of this range.
As we look ahead today, there is a busy US data calendar. Retail sales are set to fall by 0.2%, albeit from elevated levels and industrial production is estimated to rise by 0.5%, this is despite ongoing supply chain bottlenecks that have been reported. Homebuilder sentiment (August) is due as well, but is expected to remain unchanged.
On the Fed front, Chair Powell is due to give a speech which could well provide some risk to the dollar. We also have the Eurozone reading of Q2 GDP, but this is not expected to affect the euro.