Middling might be enough

GBP

The Pound had a relatively volatile day yesterday, trading within a range of 0.6% inrising from lows of 1.2872 against the Dollar, peaking at 1.2946 before settling around 1.2915 overnight. Chancellor Sajid Javid sounded more upbeat on EU trade hopes, stating a desire for a “reliable equivalence process” for financial services on which “a durable relationship” can be built.

Today’s UK GDP release could build on yesterday’s Sterling recovery with only outright recession risk certain to bring it lower. The market is expecting the uncertainty of last quarter already, and whilst positive figures would benefit a slightly oversold Pound it’s unlikely to be an avalanche. Also, due today are the Manufacturing and Industrial Production, and Trade Balance figures.

USD

The Dollar is higher for the seventh session in a row on the back of the broad-based offered bias in its peers, namely the euro, the sterling and the yen. Additionally, positive results from the US docket as of late have been also lending extra legs to the rally in the buck, which keeps navigating levels last seen in early October 2019.

Later today, the focus of attention will be on the testimony by Chief J.Powell before the House Financial Services Panel. In addition, San Francisco Fed M.Daly will speak in Dublin, FOMC’s R.Quarles will speak on Bank Supervision, St.Louis Fed J.Bullard will discuss Economy and Monetary Policy and Minneapolis Fed N.Kashkari speaks in Montana.

 

 

EUR

The Euro has continued its fall against the Dollar for the sixth consecutive day and is now threatening to break below the 1.09 figure. The continuation of the rally and strength in its U.S counterpart keeps the downside pressure intact in the pair whilst navigating the area of fresh yearly lows in the 1.09 region. Looking even further south, there seems to be no significant support levels until the 2019 low at 1.0880 which could be reached should the weakness continue. 

On the docket today, President Lagarde will speak at the ECB Annual Report at the European Parliament, while ECB’s board members P.Lane and I.Schnabel will also be speaking at events in Berlin and Karlsruhe.

Data to watch

09:30 – GBP – Prelim GDP

09:30 – GBP – GDP 

09:30 – GBP – Manufacturing

14:00 – EUR – ECB President Lagarde Speaks 

15:00 – USD – Fed Chair Powell Testifies

15:35 – GBP – BOE Gov Carney Speaks 

17:00 – GBP – MPC Member Haskel Speaks 

19:15 – USD – FOMC Member Kashkari Speaks