Markets traded flat on Wednesday, mainly due to the fact there were little economic releases of note. The main highlight of the day was the German Ifo Business Climate survey, giving investors an idea on the current business situation and expectations for the next 6 months. Forecasted at 100.4, the actual reading came in at a disappointing 99.4, thus confirming the pace economic recovery in the second half of the year has lost some momentum.
It has been reported that the Pound is now exposed to significant downside risks for a plethora of reasons. News reports that UK restaurants and supermarkets are running out of supplies could be long-term negative for the British Pound if it delays the eventual tightening of monetary policy by the Bank of England (BoE). Across the pond, COVID-19 is also proving to a nuisance to daily US life. Due to the spread of the COVID-19 Delta variant, many companies, such as Goldman Sachs is reversing their “back-to-office” stance after deciding that all staff must be vaccinated to enter its US workplaces or work from home”.
After starting Wednesday at 1.3722, GBPUSD saw little price action on the Wednesday, finally closing off at 1.3729.
GBPEUR also had an uneventful session yesterday. The pair started the day at 1.1686 and closed at 1.1684.
EURUSD also saw little volatility on Wednesday. The pair opened at 1.1742 and closed just 8 pips above at 1.1750.
The main focus of today will be the eagerly anticipated Jackson Hole Symposium. US Central bankers will meet virtually for an annual gathering traditionally held in Jackson Hole in Wyoming. Fed Chair Jerome Powell is scheduled to speak on Friday and is expected to reveal details about how and when the bank plans to begin winding down its bond-buying program. It’s likely the Dollar will see increased price action over the coming days.