• UK flash PMI beats f/c, led by strength in services sector

• Slight lift for GBP, rose to 1.3473 from 1.3459

• Data does little to detract from stagflation backdrop. Hence limited move

• Hawkish Powell risk will also cap upside in the pair

• Near-term resistance at 1.3480-1.3504 (200-hour MAs) and 1.35220-30

• Support resides at 1.3400-20
GBPUSD hourly chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

• AUD (-0.2%) selling persists, hits lowest level since Jun 23 at 0.6415

• Pair now hovering around Aug lows at 0.6420

• Softer risk tone continues to add pressure on high-beta FX

• Risk of a hawkish Powell at Jackson Hole should also keep bears in control

• Below 0.6420 puts the 200DMA in focus at 0.6384 and Jun low at 0.6373

• Resistance = 0.6455 (0.6455), 0.6500-0.6515
AUDUSD daily chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

Aug 21 (Reuters) - FX traders can use a simple option to capture a EUR/USD recovery as the daily technical chart hints at near-term gains.

EUR/USD has been under pressure this week ahead of the Federal Reserve's annual Jackson Hole symposium, with traders awaiting clues on the monetary policy path. All eyes will be on Fed Chair Jerome Powell's speech on Friday.

However, EUR/USD is being propped up by the thick cloud that currently spans the 1.1448-1.1656 region. There is a chance gains will eventually retest and break above 2025's 1.1830 peak, especially as the tenkan and kijun lines remain positively aligned.

Those who want to cover a EUR/USD recovery could buy a one-week 1.1660 EUR call option at a cost of 44 pips, priced with spot at 1.1652. Profit potential is unlimited if spot is above the 1.1704 breakeven point at the Aug 28 expiry. Losses are limited to the 44 pips premium paid.
Daily Chart:


Fenics Pricing Grid:

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• FX options expire at 10-am New York/3-pm London Thursday August 21

• EUR/USD: 1.1465-70 (1.63BLN), 1.1500 (800M), 1.1540-50 (1.3BLN)

• 1.1570-80 (1.35BLN), 1.1600 (1.63BLN), 1.1625-30 (917M)

• 1.1645-55 (693M), 1.1665-70 (957M), 1.1690-00 (2.7BLN), 1.1720-30 (1.3BLN)

• 1.1745-55 (3.14BLN), 1.1760-70 (991M), 1.1775-85 (760M), 1.1800 (3.8BLN)

• 1.1825-35 (2.52BLN), 1.1850-60 (1.2BLN), 1.1900-10 (2.22BLN)(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• Off 0.05% in a 1.3451-1.3465 range with markets on hold into Jackson Hole

• Vance says Europe must take responsibility for Ukrainian security

• UK services and manufacturing PMIs, plus European and U.S. PMIs, lead data

• Charts - momentum studies crest, negative 5, 10, & 21-day moving averages

• 21-day Bollinger bands contract - the daily studies show a downside bias

• This week's 1.3562 top then last week's 1.3594 high are the first resistance

• 1.3415 21 DMA, then the August 7th 1.3346 low is the initial support

• A close below 1.3415 21-day moving average would add to the bearish signals
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

Synopsis:

Danske remains firmly bearish on the USD both tactically and strategically. They expect EUR/USD to continue its upward trajectory, projecting a move toward 1.23 over the next 6–12 months as the US slowdown deepens and Eurozone assets recover.

Key Points:

• USD Weakness Emerging: After July’s strong USD performance, August has seen a reversal driven by mounting evidence of a slowing US economy.

• Strategic USD Bearishness: Danske continues to fade USD rallies, maintaining their bearish stance.

• EUR/USD Drivers:

  • Relative Rates: Eurozone rates are stabilizing while US easing expectations grow.

  • Asset Market Recovery: European equities and bond markets are showing resilience, improving the EUR backdrop.

  • Policy Shift: Reduced global need for contractionary policy supports EUR/USD upside.

  • Structural Tailwinds:

    • Adjustment of hedge ratios on USD assets.

    • Diminished confidence in US institutions providing a longer-term drag on the Dollar.

Conclusion:

Danske projects EUR/USD to grind higher toward 1.23 in the next 6–12 months, driven by US economic slowdown, structural USD headwinds, and improving Eurozone fundamentals. Their strategy remains to fade USD rallies as the Dollar’s strength looks increasingly unsustainable.

• NZD/JPY continues to trade heavy in Asia after fall to 85.52 post-RBNZ

• Asia so far today 85.66-96 and still heavy, another RBNZ cut seen soon

• Seems some RBNZ policy board member called for 50 bp cut yesterday

• NZD/JPY now below 100/200-DMAs at 86.53/93, 86.72-87.64 daily Ichi cloud

• Upside likely to remain heavy, especially after Jackson Hole

• AUD/JPY heavy too in sympathy, low yesterday 94.36, Asia today 94.59-90

• RBA seen on hold going forward but this view could change?

• Support still around base of 94.52-95.45 daily Ichimoku cloud

• Support also in area of multiple lows around 94.00 June 17-July 7

• AUD/JPY sees option expiries today at 93.75, between 94.15-35, 96.20-25

• Related , , for more click on [FXBUZ]

NZD/JPY:


AUD/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD -0.2% Thur in subdued trading ahead Powell's Jackson Hole speech Fri

• AUD sitting just above Aug 1 0.6419 low, tight stop losses lurking below

• Support zone between 0.6384 200-DMA & 0.6373 Jun 23 low should prevent slide

• Markets cautious on U.S. inflation as Trump's Fed interference continues

• U.S. Jul durable goods due Aug 26 (poll -4.0% m/m), AU CPI data Aug 27

• Range Asia 0.6423-365, support 0.6420 0.6373, resistance 0.6625 0.66875
AUD Daily 200-DMA & Support/Resistance

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Steady after closing down 0.25% with the U.S. dollar 0.1% lower

• Higher inflation undermines BoE rate cut hopes, could cap economic growth

• UK services and manufacturing PMIs, plus European, U.S. PMIs lead data risk

• Charts - momentum studies crest, negative 5, 10, & 21-day moving averages

• 21-day Bollinger bands contract - the daily studies show a downside bias

• This week's 1.3562 top then last week's 1.3594 high are the first resistance

• 1.3416 21 DMA, then the August 7th 1.3346 low is the initial support

• A close below 1.3416 21-day moving average would add to the bearish signals
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• +0.05% after closing unchanged with the U.S. dollar just 0.1% lower

• Russia - talks on Ukraine's security without Moscow are a 'road to nowhere'

• The US-EU trade deal is not far from the ECB's baseline forecast - Lagarde

• Charts- Neutral daily momentum studies, 5, 10 & 21-day moving averages crest

• 21-day Bollinger bands base contract - the daily signals show no strong bias

• Resistance starts at last week's 1.1730 high, then July 7 1.1789 range top

• A close below last week's 1.1590 base would turn the daily signals bearish

• 1.1600 1.633 BLN, 1.1670 1.188 BLN close Aug 21 strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.4% from Wed 0.6456 high, but holding above key support for now

• Major support zone looms between 0.6384 200-DMA & 0.6373 Jun 23 low

• Fed meeting minutes show only Bowman and Waller favoured Jul rate cut

• Markets cautious on U.S. inflation ahead Powell's Jackson Hole speech Fri

• Trump's Fed interference continues, calls for Governor Cook to resign

• U.S. Jul durable goods due Aug 26 (poll -4.0% m/m), AU CPI data Aug 27

• Overnight range 0.6424-48, support 0.6420 0.6373, resistance 0.6625 0.66875
AUD Daily 200-DMA & Support/Resistance

(James Connell is a Reuters market analyst. The views expressed are his own.)

Synopsis:

RBC argues that while the Swiss National Bank (SNB) faced external constraints at its June meeting, pressure to move further on rates or FX policy is likely to intensify. With inflation set to undershoot the SNB’s projections, policy easing appears inevitable.

Key Points:

• Policy Constraints: The SNB could not be too dovish in June, but those constraints are not permanent. Market and external pressures are building for more decisive action.

• Inflation Outlook: RBC expects inflation in Switzerland to fall short of the SNB’s medium-term projections, creating space for further easing.

• Carry Trade Dynamics: Lower Swiss rates would enhance CHF’s role as a funding currency in carry trades, reinforcing downside pressure on the franc.

• Valuation: The CHF looks overvalued, particularly against GBP, making it vulnerable to underperformance as monetary divergence widens.

Conclusion:

RBC sees the SNB as merely delaying the inevitable—further policy easing is coming. CHF downside risk is most pronounced against GBP, given valuation and policy divergence.

The dollar index eased on Wednesday, weighed down by a drop in U.S. tech stocks and fresh worries that President Donald Trump was attempting to sway Fed policy. Trump urged Fed Governor Lisa Cook to resign over mortgage-related allegations raised U.S. Federal Housing Finance Agency Director Bill Pulte. A Fed meeting summary showed that two dissenting officials favoring rate cuts last month had little support from other policymakers.

The euro, yen and Swiss franc rose against risk-sensitive counterparts. European yields were steady after weak German PPI data and ECB chief Lagarde’s remarks on the U.S.-EU trade deal. She said the agreement mostly aligns with ECB forecasts and avoids a trade war though warned it may still slow growth. As fighting in Ukraine continues, NATO military leaders held a candid video conference on Ukraine talks, while Russia warned that excluding Moscow from security discussions is a "road to nowhere." The offshore yuan reversed a loss as the Shanghai index surged to a new multi-year high. China is considering allowing the usage of yuan-backed stablecoins for the first time to boost wider adoption of its currency globally, sources familiar with the matter said. British inflation rose to 3.8% in July, its highest level in 18 months, with service sector inflation speeding up to 5%.

EUR/USD rose back above its Ichimoku cloud after finding support near its 55-day moving average of 1.1626. Technicals and option skews lean bullish though large Thursday option expiries between 1.17 and 1.18 currently cap. GBP/USD slid for a third day, dropping below its 55-day moving average of 1.3503 as risk tone deteriorated. Short-covering of EUR/GBP also weighed on the pound. Nearby cable support is at a rising 100-day moving average of 1.3407.

USDJPY dipped below 147 amid weakness in U.S. shares and cross-related sales. Price congestion near 146.70 is nearby support whereas its 21-day moving average at 147.82 is resistance.

Treasury yields were mostly lower. The 2s-10s curve was marginally lower at +54.9bp.

The S&P 500 fell 0.42% as tech shares weakened.

Oil prices climbed 1.2% after a bigger-than-expected weekly crude inventory drop.

Gold rose 0.92% on haven demand and a softer dollar, while copper gained 0.50%.

Heading toward the close: EUR/USD +0.07%, USD/JPY -0.26%, GBP/USD -0.31%, AUD/USD -0.34%, DXY -0.04%, EUR/JPY -0.20%, GBP/JPY -0.56%, AUD/JPY -0.58%.(Editing by Burton Frierson Reporting by Robert Fullem)

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Wall Street's main indexes declined on Wednesday and the Nasdaq hit a two-week low as a rally in technology stocks cooled and caution prevailed ahead of the Federal Reserve's highly anticipated Jackson Hole symposium later this week [.N] At 1330 EDT, the Dow Jones Industrial Average was down 0.11% at 44,874.23.The S&P 500 was down 0.48% at 6,380.36, and the Nasdaq Composite was down 0.99% at 21,103.35. The top three S&P 500 percentage gainers:

• Analog Devices Inc , up 4.6%

• Medtronic PLC , up 4.1%

• Regeneron Pharmaceuticals Inc , up 3.8% The top three S&P 500 percentage losers:

• Intel Corp , down 7.1%

• Target Corp , down 6.8%

• Micron Technology Inc , down 5.5% The top three NYSE percentage gainers:

• Guess? Inc , up 25.8%

• Studio City International Holdings Ltd , up 22.3%

• Aspen Insurance Holdings Ltd , up 17.4% The top three NYSE percentage losers:

• James Hardie Industries PLC , down 36.1%

• PSQ Holdings Inc , down 19.9%

• La-Z-Boy Inc , down 11.4% The top three Nasdaq percentage gainers:

• Tharimmune Inc , up 101.7%

• Alpha Technology Group Ltd , up 55.5%

• Shineco Inc , up 29.4% The top three Nasdaq percentage losers:

• eLong Power Holding Ltd , down 87.7%

• Windtree Therapeutics Inc , down 75.5%

• enVVeno Medical Corp , down 70.6%

• La-Z-Boy Inc : BUZZ - Plunges on downbeat quarterly sales forecast

• ALT5 Sigma Corp : BUZZ - Regains some ground after Tuesday's slide

• Lowe's Companies Inc : BUZZ - Rises on $8.8 billion deal to buy Foundation Building Materials, upbeat forecast

• enCore Energy Corp : BUZZ - Falls after upsized $100 mln convertible debt sale

• Target Corp : BUZZ - Down after reaffirming annual forecast despite upbeat Q2 results; names new CEO

• Estee Laude Companies Inc : BUZZ - Falls after forecasting annual profit below estimates

• Custom Truck One Source Inc : BUZZ - Dips after JPM downgrade

• Nu Holdings Ltd : BUZZ - Rises after Citigroup double upgrades to 'buy'

• Toll Brothers Inc : BUZZ - Falls after mixed Q3 results

• Figma Inc : BUZZ - Rises as Piper Sandler starts coverage with 'overweight' rating

• Rocket Pharmaceuticals Inc : BUZZ - Rises after FDA lifts clinical hold on gene therapy trial

• Dayforce Inc : BUZZ - Rises on advanced talks for $11 bln deal with Thoma Brava

• Gap Inc : BUZZ - Shares dip as Citigroup downgrades stock to 'neutral' on tariff worries

• Jiayin Group Inc : BUZZ - Dips after Q2 costs surge

• Hertz Global Holdings Inc : BUZZ - Rises on Amazon Autos partnership to sell used vehicles online

• Analog Devices Inc : BUZZ - Rises on upbeat Q4 outlook, Q3 results beat

• TJX Companies Inc : BUZZ - Hits record high after raising annual profit forecast

• Guess Inc : BUZZ - Surges on $1.4 billion take-private deal

• Snowflake Inc : BUZZ - Climbs after BofA turns bullish ahead of earnings

• National Energy Services Reunited Corp : BUZZ - Up 8% as Q2 results beat estimates

• Celldex Therapeutics Inc : BUZZ - Tumbles after halting development of esophagus drug

• Newmont Corp :

• Barrick Mining Corp :

• Gold Fields Ltd :

• AngloGold Ashanti PLC :

BUZZ - Gold miners gain on softer dollar ahead of Fed minutes, Jackson Hole summit

• Archer-Daniels-Midland Co :

• Bunge Global SA : BUZZ - J.P. Morgan assumes coverage of agricultural commodities traders ADM and Bunge

• Hecla Mining Co HL.N>:

• Coeur Mining Inc :

• Endeavour Silver Corp :

• Silvercorp Metals Inc :

BUZZ - Silver miners gain as white metal prices edge up on weak US dollar

• Avis Budget Group Inc : BUZZ - Slides as BofA double downgrades on valuation

• Exxon Mobil Corp :

• Chevron Corp :

• APA Corp :

• ConocoPhillips :

BUZZ - Oil firms rise tracking crude as investors await next steps in Ukraine peace push

BUZZ - UBS raises PT on oil & gas companies on stronger FCF forecasts, cost cuts

• Dycom Industries Inc : BUZZ - Shares slide 12% after Q2 revenue miss

• Regeneron Pharmaceuticals Inc : BUZZ - Rises after FDA's extended decision date for eye drug comes ahead of expectations

• Abercrombie & Fitch Co : BUZZ - Falls after Citi downgrades stock to 'neutral'

Index RIC Index name Percent

change %

S&P 500 -0.49

S&P 500 Information Technology -1.23

S&P 500 Utilities -0.11

S&P 500 Consumer Discretionary -1.24

S&P 500 Materials 0.11

S&P 500 Industrials -0.28

S&P 500 Communication Services -0.76

(Sector)

S&P 500 Financials 0.34

S&P 500 Real Estate 0.34

S&P 500 Health Care 0.47

S&P 500 Consumer Staples 0.67

S&P 500 Energy 0.87

(Compiled by Rajarshi Roy and Harshita Mary Varghese)

Synopsis:

BofA warns that the current spell of subdued FX volatility is unlikely to persist. Stability in rate differentials and the USD risk premium has kept price action contained in August, but both are expected to shift as markets head into September.

Key Points:

• Unusual Calm in August: Historically, August has not been a low-volatility month for FX, yet this year’s subdued moves reflect unusual stability in rate spreads and USD risk premium.

• Fragile Drivers: Neither stable rate differentials nor compressed USD risk premia are likely to last, implying scope for a volatility rebound.

• Jackson Hole Impact: Powell’s speech may not serve as the immediate trigger for a breakout, but upcoming shifts in policy outlook could still lift implied vols.

• Trade Highlight: BofA flags USD/CAD implied volatility as the most misaligned versus long-term realized levels, maintaining a bullish view on 1y vol.

Conclusion:

BofA expects FX volatility to pick up into September, even if Jackson Hole does not spark an immediate move. With structural drivers shifting, volatility trades—especially in USD/CAD—offer attractive opportunities.

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Wall Street's main indexes declined on Wednesday and the Nasdaq hit a two-week low as a rally in technology stocks cooled and caution prevailed ahead of the Federal Reserve's highly anticipated Jackson Hole symposium later this week. [.N]

At 11:30 EDT, the Dow Jones Industrial Average was up 0.09% at 44,963.13. The S&P 500 was down 0.51% at 6,378.51, and the Nasdaq Composite was down 1.10% at 21,080.58.

The top three S&P 500 percentage gainers:

• Regeneron Pharmaceuticals Inc , up 3.9%

• Analog Devices Inc , up 3.8%

• Medtronic PLC , up 3.8%

The top three S&P 500 percentage losers:

• Target Corp , down 7.7%

• Intel Corp , down 6.3%

• Palantir Technologies Inc , down 5.4%

The top three NYSE percentage gainers:

• Guess? Inc , up 25.7%

• Studio City International Holdings Ltd , up 22.3%

• Aspen Insurance Holdings Ltd , up 16.4%

The top three NYSE percentage losers:

• James Hardie Industries PLC , down 35.2%

• PSQ Holdings Inc , down 18.5%

• La-Z-Boy Inc , down 13.8%

The top three Nasdaq percentage gainers:

• Tharimmune Inc , up 141.8%

• Upland Software Inc , up 32.6%

• Shineco Inc , up 28.2%

The top three Nasdaq percentage losers:

• eLong Power Holding Ltd , down 85.6%

• enVVeno Medical Corp , down 70.2%

• Zeta Network Group , down 38.2%

• La-Z-Boy Inc : BUZZ - Plunges on downbeat quarterly sales forecast

• ALT5 Sigma Corp : BUZZ - Regains some ground after Tuesday's slide

• Lowe's Companies Inc : BUZZ - Rises on $8.8 billion deal to buy Foundation Building Materials, upbeat forecast

• enCore Energy Corp : BUZZ - Falls after upsized $100 mln convertible debt sale

• Target Corp : BUZZ - Down after reaffirming annual forecast despite upbeat Q2 results; names new CEO

• Estee Laude Companies Inc : BUZZ - Falls after forecasting annual profit below estimates

• Custom Truck One Source Inc : BUZZ - Dips after JPM downgrade

• Nu Holdings Ltd : BUZZ - Rises after Citigroup double upgrades to 'buy'

• Toll Brothers Inc : BUZZ - Falls after mixed Q3 results

• Figma Inc : BUZZ - Rises as Piper Sandler starts coverage with 'overweight' rating

• Rocket Pharmaceuticals Inc : BUZZ - Rises after FDA lifts clinical hold on gene therapy trial

• Dayforce Inc : BUZZ - Rises on advanced talks for $11 bln deal with Thoma Brava

• Gap Inc : BUZZ - Shares dip as Citigroup downgrades stock to 'neutral' on tariff worries

• Jiayin Group Inc : BUZZ - Dips after Q2 costs surge

• Hertz Global Holdings Inc : BUZZ - Rises on Amazon Autos partnership to sell used vehicles online

• Analog Devices Inc : BUZZ - Rises on upbeat Q4 outlook, Q3 results beat

• TJX Companies Inc : BUZZ - Hits record high after raising annual profit forecast

• Guess Inc : BUZZ - Surges on $1.4 billion take-private deal

• Snowflake Inc : BUZZ - Climbs after BofA turns bullish ahead of earnings

• National Energy Services Reunited Corp : BUZZ - Up 8% as Q2 results beat estimates

• Celldex Therapeutics Inc : BUZZ - Tumbles after halting development of esophagus drug

• Newmont Corp :

• Barrick Mining Corp :

• Gold Fields Ltd :

• AngloGold Ashanti PLC :

BUZZ - Gold miners gain on softer dollar ahead of Fed minutes, Jackson Hole summit

• Archer-Daniels-Midland Co :

• Bunge Global SA : BUZZ - J.P. Morgan assumes coverage of agricultural commodities traders ADM and Bunge

• Hecla Mining Co HL.N>:

• Coeur Mining Inc :

• Endeavour Silver Corp :

• Silvercorp Metals Inc :

BUZZ - Silver miners gain as white metal prices edge up on weak US dollar

• Avis Budget Group Inc : BUZZ - Slides as BofA double downgrades on valuation

• Exxon Mobil Corp :

• Chevron Corp :

• APA Corp :

• ConocoPhillips :

BUZZ - Oil firms rise tracking crude as investors await next steps in Ukraine peace push

BUZZ - UBS raises PT on oil & gas companies on stronger FCF forecasts, cost cuts

• Dycom Industries Inc : BUZZ - Shares slide 12% after Q2 revenue miss

Index RIC Index name Percent

change %

S&P 500 -0.51

S&P 500 Information Technology -1.28

S&P 500 Utilities -0.07

S&P 500 Consumer Discretionary -1.24

S&P 500 Materials 0.25

S&P 500 Industrials -0.13

S&P 500 Communication Services -1.06

(Sector)

S&P 500 Financials 0.48

S&P 500 Real Estate 0.42

S&P 500 Health Care 0.31

S&P 500 Consumer Staples 0.69

S&P 500 Energy 0.88

(Compiled by Rajarshi Roy and Harshita Mary Varghese)

Synopsis:

SocGen highlights that the labour market will be the central theme at this year’s Jackson Hole Symposium, titled “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy.” The Fed’s internal debate remains whether labour market tightness reflects weaker participation or broader economic slowdown.

Key Points:

• Labour Market Debate: At the last FOMC meeting, members split over whether tightness stemmed from labor force dynamics (participation/growth) or slowing demand. This theme is expected to dominate Jackson Hole.

• Beyond Inflation: SocGen stresses that near-term Fed policy hinges more on employment outcomes than on prices. Rising prices could worsen growth prospects, reinforcing the case for cuts.

• Upcoming Data Catalysts:

  • Sept 5: August payrolls release

  • Sept 10: August CPI

  • Sept 17: FOMC meeting
    These events will likely matter more for markets than the symposium itself.

• Policy Implication: If employment data fail to improve significantly versus July, markets may hold onto hopes for 50bps of Fed cuts before year-end.

Conclusion:

SocGen argues that the Fed’s focus should pivot more toward the labour market. While Jackson Hole will set the stage, the real denouement comes with September’s data flow, which could determine whether markets price deeper Fed cuts.

• GBP unwinds initial lift to trade below CPI reaction level (1.3490)

• As previously noted, a stagflationary backdrop is not currency supportive

• That said, with Powell speaking Aug 22 - the USD leg should dictate cable

• With the move below 1.35, further support sits at 1.3407 (100DMA)

• Resistance remains at 1.3585 (double top)

• COMMENT-BoE rate cuts are becoming a 2026 story
GBPUSD hourly chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

Synopsis:

Combining views from Goldman Sachs, MUFG, and RBC, the balance of evidence points to sterling resilience but with differentiated performance across crosses: EUR/GBP drifting higher, GBP/USD supported by USD softness and GBP beta to the euro, and GBP/CHF the most attractive near-term long.

EUR/GBP

• Goldman Sachs: Expects EUR/GBP to drift higher as UK inflation undershoots, wage growth weakens, and unemployment rises. Risks around UK fiscal outlook and long-term valuations also lean EUR-positive.

• MUFG: Stronger UK data and hawkish repricing of BoE expectations support GBP, but long-end gilt pressures could revive fiscal concerns, limiting upside.

• RBC: GBP undervalued versus EUR; expects only one more BoE cut (November). Correlation to rate differentials remains stronger against EUR, supporting GBP.

• Takeaway: Net range with a slight drift higher in EUR/GBP, as Goldman’s topside bias outweighs MUFG/RBC support for GBP.

GBP/USD

• Goldman Sachs: Projects an upward path in GBP/USD, as sterling’s high beta to the euro and softer USD backdrop drive gains.

• MUFG: Hawkish BoE repricing and firmer UK data underpin GBP, though risks tied to long-end gilts and fiscal policy could cap upside.

• RBC: GBP looks undervalued on a trade-weighted basis; GBP/USD less correlated to rate spreads this year but still has scope for near-term gains.

• Takeaway: Consensus tilt to gradual GBP/USD upside, though progress likely uneven due to global event risk and UK fiscal concerns.

GBP/CHF

• RBC: Highest-conviction near-term outperformance. UK’s relatively high yields versus SNB at 0% make GBP attractive as a carry long; falling volatility in GBP/CHF supports this view. UK’s more favorable US tariff exposure also compares positively against CHF.

• MUFG / Goldman Sachs: No direct calls, but broader GBP-supportive tone aligns with RBC’s view.

• Takeaway: GBP/CHF is the preferred long, driven by carry appeal and policy divergence.

Catalysts to Watch

• Jackson Hole (Aug 21–23): Powell’s tone on stagflation risks and Fed framework review could move USD.

• UK Fiscal Narrative: Potential tax reforms and long-end gilt yield pressures remain a GBP headwind.

Conclusion:

The cross-house consensus is clear: long GBP/CHF for near-term outperformance, constructive GBP/USD on euro beta and undervaluation, and EUR/GBP modestly higher on inflation undershoot and fiscal headwinds.

Synopsis:

Goldman Sachs expects EUR/GBP to drift higher due to downside risks for UK inflation and wages and an overshoot in unemployment, but still sees Sterling’s high beta to the Euro keeping GBP/USD on an upward path.

Key Points:

• UK Data Outlook vs BoE Projections

  • Inflation and wage growth likely to undershoot BoE forecasts.

  • Unemployment rate expected to overshoot projections, adding labor market pressure.

  • Three more inflation prints and two labor market reports before the November MPC, where GS expects another quarterly cut to be delivered (markets currently price ~1-in-3 chance).

• EUR/GBP Path

  • Risks skewed towards a grind higher in EUR/GBP from current levels.

  • Domestic fiscal risks and long-term valuation challenges reinforce relative underperformance of GBP vs EUR.

• GBP/USD Outlook

  • Despite EUR/GBP weakness, Sterling’s high beta to EUR should allow GBP/USD to follow an upward trajectory.

  • This reflects the broader USD backdrop, Fed policy shifts, and Sterling’s cyclical exposure to Eurozone flows.

Conclusion:

Goldman Sachs sees EUR/GBP bias higher into November, but maintains an upward GBP/USD path. The divergence highlights relative GBP underperformance vs EUR, yet broad USD weakness and Sterling’s Euro sensitivity should still support cable.

• AUD/USD traded 0.6456-0.6426 overnight, NY opened near 0.6435, down -0.32%

• Pair hit a 13-session low, slide stalled short of the August 1 daily low

• A bid for safety weighed; broad US$ bid, AUD/JPY slide gave bears some traction

• Drops in iron-ore , copper , equities helped weigh on AUD/USD

• Techs lean bearish; daily RSI is falling, monthly gravestone doji candle in place for August

• AUD/USD's hold below the daily cloud and 10-, 21- & 55-DMAs reinforce bearish signals

• Bears can gain more control should the 200-DMA, May monthly low break

• Minutes of Fed's July 29-30 meeting, remarks from Fed's Waller, Bostic may impact risk
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• Thin market conditions persist with the dollar holding a small advantage

• Markets cautious ahead of Friday's Fed Chair Powell speech at Jackson Hole

• Focus on whether Powell pushes back on easing bets

• Powell reluctant to cut because of expected tariff-driven price pressures

• Traders now place odds of about 85% on a quarter-point cut in September

• EUR/USD has slipped below its daily cloud top: now resting on 20DMA, 1.1622

• Risk of a further drop to the August 11 1.1590 low

• Fibo retrace level off the 1.1392-1.1730 climb are at 1.1601 and 1.1561
EUR/USD daily candle chart:

(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• Traders focused on whether Powell pushes back on easing bets

• Markets lay 84% odds on a Fed rate reduction next month

• NZ dollar at 4-month low as RBNZ flags further rate cuts

(Updates for European morning trade)

By Samuel Indyk and Kevin Buckland

LONDON, Aug 20 (Reuters) - The U.S. dollar was little changed on Wednesday as traders awaited a speech from Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium later this week for clues on the monetary policy path.

The New Zealand dollar tumbled after the central bank reduced its cash rate by a quarter point to 3.0% as expected, and said its board had also considered a half-point cut.

The dollar index , which measures the U.S. currency against six others, was flat at 98.319, after earlier touching a more than one week high of 98.441.

Friday's speech by Powell is the market's main focus, as traders watch for any pushback against market pricing of a rate reduction at the Fed's September 16-17 meeting.

Traders now place odds of about 85% on a quarter-point cut next month and expect about 54 basis points of reductions by year-end.

"Powell will try to be fairly balanced, but there is a risk we see a hawkish Powell on Friday," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank.

"Some of the developments we've seen in inflation dynamics will keep the Fed more cautious."

Traders, who ramped up bets for Fed cuts after a surprisingly weak U.S. payrolls report at the start of this month, were further encouraged after consumer price data showed limited upward pressure from tariffs.

However, a hotter-than-expected producer price reading last week complicated the policy picture.

Powell has said he is reluctant to cut rates because of expected tariff-driven price pressures this summer.

Later on Wednesday, the Fed will issue the minutes of its meeting on July 29 and 30, when it held rates steady, although they may offer limited insight as the meeting came before the weak jobs numbers.

The kiwi slumped as much as 1.3% to $0.5815, its weakest since April 11, with policymakers lowering their projected floor for the cash rate to 2.55%, from 2.85% forecast in May.

"The market did not expect the bank to send a strong dovish signal that it intends to deliver further cuts," Prashant Newnaha, a rates strategist at TD Securities, wrote in a client note. He has increased his forecast for additional easing, now projecting a cash rate of 2.5% by November.

The Swedish crown was steady after its central bank maintained its policy rate at 2%, in line with expectations.

The euro eased 0.1% to $1.1636. The greenback advanced 0.1% to 0.8078 Swiss franc , though it edged down 0.1% to 147.61 yen .

The pound rose slightly against the euro and dollar after hotter-than-forecast inflation, leaving Britain with the biggest price growth problem amongst the world's big rich economies.

But much of the rise in services inflation was driven by volatile airfares, which some economists said was due to the timing of the school holidays.

"The BoE (Bank of England) is more concerned about food inflation, which hasn't changed much in today's release," ING's head of research Chris Turner said.

"We doubt today's CPI release will alter much of the BoE's current thinking."

In cryptocurrencies, bitcoin hovered at around $113,897 after earlier dipping to the lowest since August 3 at $112,578.38, pressured by a strengthening dollar.

Ether was up 1.8% at $4,234.

(Reporting by Samuel Indyk and Kevin Buckland. Editing by Sam Holmes and Mark Potter)

• AUD dragged lower as NZD drops on dovish RBNZ

• Softer risk tone also pressuring high beta FX

• Pair makes a clean break through 100DMA (0.6453), heads for Aug 1 low

• Sub-100DMA close would be significant and add to bear momentum

• Through the Aug 1 low, focus would turn to the 200DMA (0.6384)

• Resistance at 0.6500/16 and 0.6569
AUDUSD daily chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)