Brexit, PMIs, the ECB and Jackson Hole Put the GBP, EUR and USD in Focus

It’s a busy day ahead as the markets react further to the FOMC meeting minutes. Chatter from Jackson Hole may overshadow the stats…
Bob Mason
Currencies Symbols

Earlier in the Day:

The economic calendar was on the busier side through the Asian session this morning. Private sector PMI numbers out of Japan providing direction early on.

Outside of the numbers, the markets also responded to the FOMC meeting minutes that were released late on Wednesday.

Also influencing sentiment on the day was trade war chatter and Trump’s talk of payroll tax reforms to support the domestic economy.

For the Japanese Yen

Japan’s August prelim Composite PMI came in at 51.7, up from 50.6 in July.

  • August’s prelim Manufacturing PMI came in at 49.5, up marginally from 49.4 in July.
    • New export orders saw a stronger decline, while total new orders saw a slower pace of decline.
    • The continued fall in new orders led to a slower pace of hiring in the sector, resulting in a weaker depletion of backlogs.
  • Japan’s prelim Service PMI also softened, rose from 51.8 to 53.4, its highest level since Oct-17.
    • By contrast, new export orders and new business saw stronger growth in August.
    • Payrolls rose at a quicker pace, supported by stronger demand for services.

The Japanese Yen moved from ¥106.564 to ¥106.573 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.07% to ¥106.55 against the U.S Dollar.


The Kiwi Dollar was up by 0.05% to $0.6407 at the time of writing, while the Aussie Dollar was down by 0.03% to $0.6779.

The Day Ahead:

For the EUR

It’s a particularly busy day ahead on the economic calendar. Key stats due out of the Eurozone include August prelim private sector PMI numbers for France, Germany and the Eurozone.

While the markets have conceded that manufacturing sector activity has hit a wall, any further slowdown will likely test the EUR.

Increased focus on service sector activity will also leave the EUR exposed to any disappointing numbers service PMI figures.

Later in the European session, the ECB monetary policy meeting minutes are due out. There’s been some dovish ECB chatter of late. Any suggestions of a near-term move to cut rates would likely see the EUR slide back to sub-$1.10 levels.

From elsewhere, chatter from the Jackson Hole Symposium will also need to be monitored later in the day.

At the time of writing, the EUR was up by 0.03% to $1.1088.

For the Pound

It’s a quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats leaves the Pound firmly in the hands of Boris Johnson, who is due to meet with Macron following Wednesday’s meeting with Merkel.

While Chancellor Merkel reiterated her optimism that a solution to the backdrop can be found, Macron is the real test…

At the time of writing, the Pound up down by 0.02% to $1.2132.

Across the Pond

It’s a relatively busy day on the economic calendar. The weekly jobless claims figures are due out ahead of prelim August private sector PMI numbers.

Barring a material jump in claims, the focus will be on the PMI numbers. While the services PMI will have the greatest influence, the manufacturing sector will need to avoid a contraction in August.

Outside of the numbers and the key driver on the day, are speeches from the Jackson Hole Symposium.

Trump has complained once more over FED monetary policy this week, blaming the FED Chair for the recent sell-off in the equity markets.

Powell’s response will be of interest as the markets continue to hope for more FED support.

At the time of writing, the Dollar Spot Index was down by 0.02% to 98.279.

For the Loonie

It’s a relatively quiet day ahead on the economic calendar. June wholesale sales figures are due out of Canada.

While we expect the Loonie to be sensitive to the numbers, the direction will continue to come from market risk sentiment on the day.

The Loonie was down by 0.02% at C$1.3294, against the U.S Dollar, at the time of writing.

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