A number of events this week could have an impact on Sterling and the Dollar. The Fed’s summit in Jackson Hole should give us more of an insight on US economic performance. Zelenskiy also returns to the White House for what could be a pivotal meeting. However, the markets won’t react until something substantial happens. In other news, UK house prices are down. All this and more below.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1681 |
| gbp eur | 1.1591 |
| gbp usd | 1.3545 |
Rates correct as of 10:15am on Monday 18 August but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Sterling and Dollar eye Powell’s next swing at Jackson Hole
The Federal Reserve’s Jackson Hole symposium is in focus this week, where Jerome Powell will give a speech on the US economic outlook. We’ll be watching keenly for any impact on GBP/USD. Markets broadly expect a rate cut before year-end, though timing remains uncertain, and any hint of hawkishness from Powell could jolt sentiment. Sterling, meanwhile, is holding recent gains against the dollar after last week’s breakout, with further moves hinging on UK inflation data, PMI results, and the Fed’s messaging. Expectations for Bank of England cuts have been pared back as inflation proves sticky, keeping traders cautious as the week unfolds.
Europe awaits outcome of Zelenskiy White House visit
Talks between Russia and Ukraine remain at a stalemate, with President Zelensky now set to meet Donald Trump, following the latter’s muted meeting in Alaska last week. Ending Europe’s deadliest war in 80 years would of course be a victory, but significant unease across the continent persists over concessions that might hand territory to Moscow. Until there is a decisive shift, markets are unlikely to move, and the euro looks set to continue treading water.
House prices fall and rate cuts helping borrowers for now
UK house prices have fallen in summer, following larger than expected drops in recent months. The market is adjusting to higher stamp duty and a swell in supply with Rightmove reporting the biggest July drop in asking prices since records began. Properties for sale have also risen around 10 %, giving buyers the upper hand. While recent rate cuts from the Bank of England are helping ease mortgage costs, their effect may be modest going forward, as persistent inflation keeps upward pressure on the broader outlook.
Looking forward
Today: Ukraine’s president Volodymyr Zelenskiy will meet Trump in Washington.
Tuesday: Canada CPI. US Housing reports starts.
Wednesday: Inflation rate YoY. Fed publish FOMC minutes.
Thursday: UK manufacturing and services data. Euro manufacturing PMI.
Friday: Fed Chair Powell speech. UK retail sales data.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- Changing Federal Reserve interest change likelihood.
- Trump and his various leadership meetings.
- The Jackson Hole summit and the outcomes.
The contents of this article do not constitute financial advice and are provided for general information purposes only.