Monday was a fairly subdued day across the foreign exchange market. August is generally a quiet month for financial markets, and yesterday’s price action was a good reminder of this. Most participants will have used Monday to continue to digest last week’s very strong US employment report. The market now finds itself at a juncture in the sense of defining when the Fed will begin to taper asset purchases. This decision is a big one as it will signal to the markets an end to the emergency accommodation which has been in place since April 2020.
While price action was tame yesterday there was a clear demand for US dollars. The pound and euro both slid lower against the buck. The euro saw deeper losses than the pound which pushed GBPEUR above the €1.18 handle and to its highest level since February last year.
Today’s economic calendar is sparse. The only real release of note comes in the form of the German ZEW economic sentiment gauge, scheduled for release at 10 am.
Written by Viv Savani. 8:27am, August 10th 2021
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