Euro stands firm
- 28/06/2022: EU – ECB Forum on Central Banking
- 28/06/2022: EU – CB Consumer confidence
- 28/06/2022: US – Gfk Consumer Confidence
- 29/06/2022: EU – ECB President Lagarde Speech
- 29/06/2022: UK – BOE Gov Bailey Speech
- 29/06/2022: US – FED Chair Powell Speech
- 29/06/2022: EU – ECB Forum on Central Banking
- 29/06/2022: US – GDP Growth Rate QoQ Final
- 30/06/2022: UK – GDP Growth Rate YoY Final
- 30/06/2022: US – Core PCE Price Index YoY
- 01/07/2022: EU – Core Inflation Rate YoY Flash
- 01/07/2022: US – ISM Manufacturing PMI
The Euro has continued to stand firm with the markets attitude to risk assets remaining relaxed rolling into this week. EUR/USD continues to consolidate in a sideways trading pattern. The rate has spent the last fortnight in a range between 1.0359 – 1.0638 and the price is currently nearing the higher end of this.
Tuesday will see an ECB forum take place in Sintra, Portugal. A star-studded panel will see Fed Chair Jerome Powell, ECB President Christine Lagarde and Bank of England Governor Andrew Bailey all appear on stage at the same time. Alongside this, the economic calendar is packed with high impact events in the coming week. Main focus will continue to remain on inflation releases from both the EU and US. Anything higher than the expected 3.8% in the EU could trigger hawkish bets on the next EU interest rate hikes, but this will be tempered by the aggressive outlook from the Fed, which will likely continue to negate any significant euro gains in the coming weeks.
GBP/USD is holding onto the latest upside around 1.2300 in early European trading. The risk-on mood dents the US dollar’s safe-haven appeal while the UK presses on with changes to the Brexit deal despite EU opposition.
On the other side of the scales, the downside risks to growth resulting from higher interest rates have resulted in a fractured relationship between GBP and the Bank of England. Doom-ridden predictions about the risks to growth have been a constant weight for sterling, and will continue to remain so.
The BOE is not scheduled to update its forecasts again until August, but investors may take little comfort from another rate hike when they next meet. Growth fears have been reinforced by April’s growth data but the recent strong labour data has given the pound a softer landing.