RedFX Snap: EUR/USD at lowest rate since 2002

This afternoon EUR/USD fell to 0.9950 – a level not seen since 2002. This comes on the back of (1) more weak European data from Germany (2) speculation the Fed will later this week reiterate that it will continue ‘higher for longer’ interest rates to battle inflation.

One thing to be VERY aware of is the risk that comes into play later this week… Thursday and Friday the Jackson Hole central banker’s symposium. The US Fed speaks on Friday about whether they will continue to aggressively raise rates, and therefore whether USD strength will continue.

A lot will hinge on what is said .. As things stand, markets are forecasting a 62% chance that the Fed will proceed with a third-consecutive 75 basis point hike in September; such odds have increased dramatically from the mere 26% chance accorded at the start of August.

Details……………..

Thursday, 25 August 

• JPY: Japan PPI

• Jackson Hole Economic Policy Symposium

• EUR: ECB minutes

• EUR: Germany GDP (final), August IFO business climate

• USD: US GDP (second estimate), initial jobless claims

Friday, 26 August 

• NZD: New Zealand consumer confidence

• USD: Fed Chair Jerome Powell's speech at Jackson Hole

• USD: US July PCE deflator, personal income/spending, August University of Michigan consumer sentiment (final)

Please call or email for all you FX and payments needs.

Regards

The RedFX Team