Caution Over Weakness in European Currencies?

Caution Over Weakness in European Currencies?

07.10.2021

Yesterday, in the U.S. market, the three major stock indices all rose toward the close, resulting in a market environment characterized by higher stock prices, higher interest rates, and lower crude oil prices.As concerns over a U.S. government default eased, buyback activity set in, causing stock prices to rise toward the end of the session. The Russell 2000, which tracks small-cap stocks, was unable to recover from the previous day’s decline and closed down 0.6% at 2,214.

In the foreign exchange market, the pound—which had been rebounding—is once again trending lower, with the GBP/USD pair trading around 1.358. On the hourly chart, the GBP/USD pair appears to be forming a triple top pattern, so this is a point where we need to carefully assess whether the pound will continue to show significant weakness against the U.S. dollar and whether the downward trend will persist.

Today, at 15:00, Germany’s industrial production and the UK’s Halifax house prices will be released; at 15:45, France’s trade balance and current account balance will be released;at 20:30, the Eurozone ECB Governing Council Meeting Minutes and U.S. Challenger Layoff Announcements; at 21:30, U.S. Initial Jobless Claims; at 21:40, remarks by U.S. New York Fed President Williams; at 23:00, Canada’s Ivey PMI;23:30: U.S. Weekly Natural Gas Inventories; 24:45: U.S. Remarks by Mester, President of the Cleveland Fed; 25:00: Canada: Remarks by Macklem, Governor of the Bank of Canada; 28:00: U.S. Consumer Credit Balance.Ahead of tomorrow’s U.S. jobs report, we will be closely monitoring the strength and weakness of the U.S. dollar and European currencies.