Today’s European FX session was largely subdued, with the headline being the UK CPI report that nudged services inflation up to 5.0% YoY.
Key moves
- UK July CPI rose to 3.8% YoY, above the 3.7% consensus, pushing the pound up briefly before settling back.
- ECB President Lagarde warned that trade‑deal uncertainty remains, tempering euro‑positive sentiment.
- Fed Chair Jerome Powell’s anticipated Jackson Hole remarks are expected to stay data‑driven, with no overt rate‑cut signal.
- European stocks moved sideways, reflecting caution ahead of the symposium.
- FX option expiries for 20 Aug cut 10 am New York, tightening forward curves.
Summary
The UK’s stubborn inflation keeps the Bank of England in a difficult spot, while the euro remains muted amid lingering trade‑deal worries. Markets await Powell’s speech, with a hawkish tone likely to prompt risk‑off and a dovish stance sparking a rally.
(Source)
