)
GBP - UK politics to determine Sterling's next move
Sterling retains a constructive outlook ahead of a week dominated by UK political and central bank events. While GBP/EUR holds above its rising moving averages, the bias remains modestly higher. Another test of €1.1600 looks likely, but a decisive daily close above this level is needed to confirm a breakout towards €1.1632. Until then, consolidation within the current range is the most likely outcome, with a slight bias towards further Sterling gains.
There are no tier-one UK data releases this week, leaving politics in focus as Andy Burnham outlines his economic agenda in Manchester. Markets will be watching for clues on fiscal policy, with investors balancing concerns over his left-leaning instincts against the need for market-friendly policies. Oxford Economics says markets have remained calm so far, but warns sentiment could quickly deteriorate if Burnham missteps.
Weekly Data:
Speaker: 1st July BoE Gov. Bailey
EUR - Euro expected to push higher versus USD
Commerzbank’s Michael Pfister argues that recent EUR/USD weakness reflects Dollar strength rather than Euro fragility, with Fed expectations driving the move. He notes falling Oil prices and collapsing inflation expectations limit ECB hike prospects, while a softer Dollar would require Fed expectations to retreat. Commerzbank expects Euro area inflation to stay relatively high, but sees $1.1800 in EUR/USD only returning over a longer horizon.
Weekly Data:
Tuesday 30th June - German CPI
Monday 29th June & Wednesday 1st July & Friday 3rd July : ECB President Lagarde Speaks
USD - Dollar Index trades flat at the start of the US NFP data week
The US Dollar starts the week on a steady note, with the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trading calmly near 101.35.
However, investors brace for high volatility in the counter as an array of United States (US) data is scheduled to be published this week, especially the Nonfarm Payrolls (NFP) data for June, which will be released on Thursday.
This week, investors will also focus on the US JOLTS Job Openings data for May, and ISM Manufacturing PMI and ADP Employment Change data for June.
On the global front, investors await talks between the US and Iran in Qatar after the exchange of attacks in the last several days near the Strait of Hormuz, a critical chokepoint to one-fifth of global energy flows.
Weekly Data:
Tuesday 30th June - CB Consumer Confidence & JOLTS Job Openings
Wednesday 1st June: ADP Non-farm Employment & ISM Manufacturing PMI, Fed Chairman Warsh speaks
Thursday 2nd June: Nonfarm, Unemployment Rate & Average Earnings
US Banks are closed on Friday 3rd July for Independence Day.
Subscribe to our weekly market updates for expert insights into major currency movements.
At VFX, our team of experienced brokers supports businesses in navigating volatile currency markets, ensuring that our clients can move, manage and protect money across borders without friction.
If your business is looking for alternative banking solutions or ways to mitigate FX risk, contact our team today or call +44 (0) 20 7959 6900.