We had a pretty interesting week on markets with the Jackson Hole Symposium being a non event with no real policy change announced, the FOMC maintained that they will hike rates again if they feel it is necessary, but this will be entirely data-driven.
The week ended with Sterling falling to 1.26 against the Dollar- while remaining at a respectable 1.16 against the Euro.
This week is not expected to be too volatile- with it being the last week of the month we may see some end-of-month movement but we do not have heaps of data to analyze- Tuesday is relatively clear, and on Wednesday we have UK & US mortgage approvals- both quite important releases given the current climate in both respective property markets- now rates have eased off slightly it will be interesting to see how many people are still in the market for a mortgage. More importantly though, on Wednesday afternoon we have U.S GDP data which is expected to show the economy grew by 2.4% in the last quarter- if we do see this positive release then I expect to see Dollar strength into the close on Wednesday.
On Thursday the key release is European flash CPI (Flash is an estimate)- which is expected to show a slower rate of inflation at 5.3%, this will have some impact but most traders will wait for the real data releases- but this will give an idea of where things are going. Later on Thursday, we have numerous U.S releases including the PCE price index, jobless claims, and personal spending- all very important releases for the Fed, if jobless claims continue rising then it does not warrant raising rates again, however, if consumers are still spending a lot then this counteracts this as this will keep inflation running hot.
On Friday (1st September) the key release will be Non Farm Payrolls for the U.S- as we know the jobs market is one of the main indicators the Fed is watching so this release will have a significant impact on the Dollar.