Focus on BoE rate decision.

The foreign exchange (FX) markets saw significant movements on 2nd August 2023 as markets reacted to key economic data releases and central bank statements. Here’s a recap of the events that shaped the market for the currencies GBP, EUR, and USD:

GBP (British Pound): The British Pound (GBP) remained relatively stable on 2nd August. The currency faced mixed trading conditions as no significant economic data releases directly impacting the GBP were reported during the day. However, the main focus was on the Bank of England’s (BoE) interest rate decision, scheduled for tomorrow. The main consensus is that the BoE will raise the base rate by a further 25 basis points.

EUR (Euro): The Euro (EUR) displayed stability on 2nd August after the Eurozone’s Manufacturing PMI data for July was released. The PMI figure came in as expected, indicating a stalling of the region’s manufacturing. The data had a limited impact on the EUR’s movements, as it confirmed market expectations.

Markets were also looking forward to the Eurozone Retail Sales data for June, which is scheduled to be released on Friday. The Retail Sales figures will provide insights into consumer spending patterns and the strength of the Eurozone’s retail sector.

USD (United States Dollar): The United States Dollar (USD) encountered headwinds on 2nd August as the US Manufacturing PMI for July was released. The PMI figure came in lower than expected, indicating a slowdown in manufacturing activity. The disappointing data contributed to the USD’s weakness against some of its major counterparts.

The key economic event of the week, the release of Non-Farm Payrolls (NFP) data is set to be released on Friday. NFP is a crucial indicator of the US labor market’s health and often has a significant impact on the USD’s performance. NFP figures help to gauge the strength of the US economy with potential implications on the Federal Reserve’s monetary policy decisions.

Key Data Releases:

  • Eurozone Manufacturing PMI (EUR): The Eurozone’s Manufacturing PMI for July came in as expected, indicating little expansion of the region’s manufacturing sector.
  • Eurozone Retail Sales (YoY) (Jun): The Eurozone’s Retail Sales data for June will be released on Friday, providing insights into consumer spending patterns and the strength of the retail sector in the region.
  • US Manufacturing PMI (USD): The US Manufacturing PMI for July came in lower than expected, indicating a slowdown in manufacturing activity and contributing to the USD’s weakness against some major counterparts.
  • Non-Farm Payrolls (NFP) (USD): NFP data is set to release on Friday, providing crucial insights into the US labor market and its potential impact on the USD.
  • Bank of England (BoE) Interest Rate Decision (GBP): The BoE’s interest rate decision is scheduled for tomorrow and is being closely monitored for any indications of potential rate adjustments or changes to monetary policy.

In conclusion, the GBP, EUR, and USD experienced varied trading conditions on 2nd August 2023, driven by economic data releases and expectations of central bank decisions. The GBP remained relatively stable, the EUR displayed stability after meeting expectations in the PMI data, and the USD encountered headwinds due to the lower-than-expected PMI data.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.