The US Dollar Index increased by more than 2% in the previous week and had its largest week gain of 2024. This morning its currently trading around 102.50.
Higher than expected employment data for September was released last Friday, where Nonfarm Payrolls rose by 254,000, beating expectations by 140,000.
This week’s key US data will be FOMC minutes on Wednesday and US Core CPI data on Thursday.
EURUSD is holding a lower position this week, trading below 1.0980 in the early European session today. With strong US Nonfarm Payroll data from last week, the pair is struggling despite the risk-on market mood.
Key EU data this week includes German Industrial Production data on Tuesday. Prior data release was -2.4%. Any improvement will do little to counteract the increasing evidence that Europe’s largest economy is struggling to recover, plagued by weak global demand, tight financing conditions, and high energy prices.
The ECB Monetary Policy Account will come out on Thursday, providing minutes from the ECB’s Governing Council meeting on Sepember. 11-12. This will be key in finding any indications of an interest-rate cut in October. Data is a focus for changes in ECB sentiment, and currently markets are pricing a 25bps cut on October 17 and another 25bps cut in December.
EURGBP will likely move lower as economic data coming from the Eurozone has proven a need for more aggressive interest-rate cuts compared to the UK.
GBPUSD is trading near 1.31 this morning as the US Dollar finds fresh demand for the week ahead.
UK Monthly GDP data will come out on Friday. The upcoming monthly GDP print is likely to show the economy had a decent growth pace in the third quarter. Prior data came in at 0.0%, with estimates for the print at 0.2%.
