Investors Look Ahead to Fed Meeting
Last week, the main pairs continued to trade within the fairly narrow ranges we have seen over the summer. The euro started the week on the backfoot against both the dollar and sterling. The prospect of rate hikes occurring in the US and UK well ahead of the Eurozone was an influence behind this. In terms of figures, EUR/USD moved within the $1.17- 1.18 band. Trading was at the lower end of $1.17 for the first half of the week, before pushing into the upper half of the range towards the end of the week. Similarly, EUR/GBP was under pressure initially as it fell to 84.5p, its lowest level since Q1’20, but moved back into the 85p level heading into the weekend. Elsewhere, GBP/USD spent most of the week trading in the $1.38-1.39 band.
Looking ahead to this week, the Fed meeting minutes will be closely scrutinised by the dollar traders, with an early announcement on the timing of QE tapering possibly coming into play.
Data-wise, US retail sales figures for July is an event worth watching. For sterling, retail sales data, as well as inflation numbers, are ones to watch. For the Eurozone, the macro diary is very sparse.