USD off recent lows as markets look ahead to Jackson Hole

Good morning

Decent US PMI’s Friday helped give the US dollar a touch of strength into the end of the week but only after GBPUSD had hit 1.3675, its highest level since Feb 2026.  The USD recovery has been shallow mind you, GBPUSD got down to around 1.3620 but this morning is back up to the mid-1.36’s.   EURUSD touched 1.1710 before slipping back to 1.1670, we’re just a few pips above those lows right now which puts GBPEUR 1.1685, 20 pips or so above Friday’s lows.   

USDJPY tested down to 158.35 Friday morning, but the USD strength lifted it to the 159.10 area which has capped the upside for a few days.  GBPJPY is 217.10, its highest level since the joint US/Japan intervention that dragged the pair down to 209.50 or so.  In other crosses, GBPAUD is 1.9040, GBPNZD 2.2850 and GBPCAD 1.8870, CAD weaker following what seems like a pretty serious break down in US/Canada trade talks, indeed Canada PM Carney went as far to say they are at war with US over trade.  US tariffs on Canada remain in place, Canada will retaliate with tariffs of their own and US are likely to announce additional tariffs in another tit for tat move.

US TrsSec Bessent will outline the financial plans of the ‘economic D-day’ he hopes will bring Iran to it’s knees, or at least to the negotiating table.  Iran see any new sanctions as a sign of desperation from the US, with success far from a certainty. Oil prices have started the week on a softer footing, with Brent and WTI around $91 and $85 respectively, $2.5-3.5 down on last week’s highs. 

As for weekend sport, well the Premier League certainly opened with a few surprises which makes the new season as interesting, and concerning, as ever.  Spurs were completely taken apart by Brentford, Man Utd face a similar issue at newly-promoted Hull, while Man City and Liverpool left it late to salvage points from their matches against Bournemouth and Newcastle.  Of the ‘big six, so far it is only Arsenal who dominated their match, sending an ominous message to their rivals.  Chelsea take on Fulham this evening. 

In F1, Lando Norris won a pretty exciting Dutch grand prix, the last time we’ll see an F1 race at the circuit, not even Verstappen’s Dutch roots enough tot keep F1 in the Netherlands.  And in cricket, the England v Pakistan test match didn’t even make it to the weekend after England beat their opponents by an innings and 103 runs inside three days.  If you think that was quick, Australia beat Bangladesh on day two of their five day test match, not great adverts for test cricket.  And finally, rugby fans may well have enjoyed the battle of giants South Africa v New Zealand on Saturday, the All Blacks coming away with a decent victory.  This is a four match series, the next match is next weekend.

Not much due from the UK in terms of economic data this week.  US core PCE possibly the highlight of the week although many will be looking more at the Feds Jackson Hole symposium which begins on Thursday, Warsh’s first as Fed chair and perhaps give an insight into his current thinking.  RBA minutes,  Aussie inflation and Canadian GDP are all on the calendar this week. 

Have a great day…

-  02.30 RBA minutes

-  07.00 German GDP