Exchange Rate Outlook: Jackson Hole Meeting in Focus

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Pound Sterling

The Pound weakened against the Euro and other major peers overnight as disappointing UK retail sales data weighed heavily upon the currency. The data released by the Office for National Statistics showed that sales increased by just 0.1% in July, worse than the 0.4% increase forecast by economists. With no market moving data releases due on Friday, Sterling is likely to remain under pressure.

US Dollar

The US Dollar retreated slightly against its major peers as economists widely ignored a string of positive domestic data releases. The currency weakened as investors locked in profits before the end of the week and turned their attention to Friday’s Federal Reserve Chairman Speech at the annual Jackson Hole symposium.

The Euro

The Euro regained ground against several major peers despite another session filled with disappointing economic data releases. The currency took advantage of investors embarking on a bout of profit taking. With no domestic data releases due for release in Friday’s session the Euro’s movements will be dependent on geopolitical events and the evening’s Jackson Hole conference. European Central Bank President Mario Draghi is due to deliver a speech.

Australian Dollar

The ‘Aussie’ edged higher against the Pound and US Dollar on Friday as traders settled into a pattern ahead of speeches at the Jackson Hole conference. With a lack of economic data releases, the currency is expected to experience light trade. Hawkish comments by Fed Chairman Janet Yellen tonight will likely weaken the ‘Aussie’.

New Zealand Dollar

The New Zealand Dollar is on course to make a 0.9% five-day decline as concerns over falling dairy prices and a stronger US Dollar have weighed upon the ‘Kiwi’.

Canadian Dollar

The Canadian Dollar is close to a six-month high against the Pound and could make further gains if Friday’s Consumer Price Index data comes in positively. Retail sales data is also due and could add to gains if it beats economist expectations.

South African Rand

The Rand is trading in a tight range as it holds onto the previous session’s advance ahead of a speech by the Federal Reserve chair Janet Yellen. Either the speech at Jackson Hole could give new direction to the US Dollar, which could be beneficial to the Rand, or it could be detrimental – it all depends on whether Yellen is hawkish or dovish in her comments.

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