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27/07 – All quiet ahead of the Fed

GBP: Falling cases helping matters

EUR: Waiting on the Fed

USD: Fed should allow for some dollar strength


News of falling Covid-19 cases has offered sterling a little support and allowed the pound to recover some of the losses it suffered last week. The case numbers are strange though; either people reacted to ‘Freedom Day’ by becoming way more cautious which would be odd, we suddenly hit some herd immunity threshold, or people have simply stopped testing themselves.

In the short term however, sterling should be fairly quiet in these rather dull summer markets.


Like the dollar was waiting on the European Central Bank this time last week, now the euro is waiting for tomorrow’s Federal Reserve meeting. We estimate that EURUSD could move lower towards the 1.17 mark although GBPEUR is unlikely to see too much interest.

The European data calendar is quiet too.


With the Federal Reserve meeting on the docket for tomorrow evening, it makes sense that today should be a quiet session for most currencies. The expectations for the meeting are somewhat hawkish and could lead to a slight rally in the USD but we are not expecting too much of a move this week.

We expect things to heat up as we get closer to the Jackson Hole economic symposium at the end of the summer but, for now, dollar demand should be held up by both the belief that the US economy is outperforming emerging markets and that the wider global recovery is less than certain.


Whilst not strictly a currency, moves in the world of crypto must have attention paid to them. US investigations into the use of a stablecoin called Tether and whether the company misled investors. Stablecoins are meant to match ‘real’ assets but the accusation remains that this company, one of the largest in the industry, broke those rules.

This remains a great issue with crypto assets and will limit the ability of them to meaningfully become part of the investment landscape.

Market rates

Today’s Interbank Rates at 08:57 against sterling. Movement vs yesterday.

US dollar$1.379 
Australian dollar$1.876 
South African randR20.57 
Japanese yen¥151.8 

Have a great day.

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Jeremy Thomson-Cook

Jeremy Thomson-Cook

Jeremy has over 13 years experience working in the FX industry. As a specialist in political risk mitigation and currency hedging, he regularly advises clients on the day-to-day moves of the markets and the implications of fiscal and monetary policy on international businesses.