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Currency Market Update - 4th September 2023

Currency Market Update As the first full week of the month fets into full swing- we have a pretty quiet Monday with it being Labor day in the U.S- the only key release will be a speech from ECB President Lagarde, markets are quite torn on whether the ECB will raise rates again so this speech may provide some insight into the ECB’s thoughts before the next rate decision.

Tuesday is also a relatively quiet day- the only release is the RBA interest rate decision where rates are expected to stay on hold- so Wednesday is the next day we will have some key releases- the first ill be S&P Global construction PMI for the UK, which is expected to come in weaker at 50.7- this will be expected as construction usually slows down during the Summer months, and as the number is still above 50- I do not expect this to be a market mover in any sense if it comes out as expected. Later in the morning, we have Eurozone retail sales- which are still expected to come out as a minus figure- this will generally show that the European public cannot afford another rate hike if spending is already low. Later in the afternoon, we have U.S balance of trade data and composite PMI, both expected to be quite weak compared to previous releases- this will be followed by the Bank of Canada’s interest rate decision- where rates are expected to be held at 5%- any change from this guidance will move the market.
On Thursday we have GDP growth rate estimate numbers out of Europe which are expected to show 0.3% growth- which is a positive for the ECB, however as this is just an estimate I am unsure how much stock will be put into it, but a positive jump is welcomed for the European economy none the less. We also have jobless claims out of the U.S later in the afternoon which is expected to come down slightly, jobs are very much a fluctuating issue in the U.S right now, the labour market is definitely slowing down it is just taking time to show in the numbers- this will eventually mean the Fed will pause on rate hikes as they have effectively slowed down demand enough.
The 3 key dates for interest rate decisions are below;

20th September - Federal Reserve
14th September - European Central Bank
21st September - Bank of England

If you are trading either GBP,EUR or USD- the above dates are key this month for forecasting.



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