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The Euro-Zone Sentix investor confidence index retreated to –22.5 for July from –17.0 previously which was significantly below expectations of –17.9 and the weakest reading since November 2022. Sentix commented that there were particular concerns surrounding the German outlook. The data will maintain underlying reservations surrounding the Euro-Zone economy. The Euro was still able to make some headway after the European open, but unable to move above Monday’s high and drifted lower towards 1.0950 into the US open as relatively narrow ranges prevailed.

The US employment trends index dipped to 114.31 for June from 116.15 the previous month.

The Euro found support below the 1.0950 level against the dollar and strengthened to test the 1.1000 level after the European close as the dollar overall failed to hold a tentative recovery. The US currency remained on the defensive on Tuesday with the Euro trading at 2-month highs above 1.1000.


The dollar was unable to sustain gains ahead of Monday’s New York open and gradually lost ground. The New York Fed one-year inflation expectations index retreated to 3.8% for May from 4.1% previously and the lowest reading since April 2021 while 3-year expectations held at 3.0%.

Fed Vice-Chair Barr stated that inflation is far too high while the bank is close, but still has a bit of work to do.

Clevland Fed President Mester stated that the economy has proved stronger than expected and that inflation is stubbornly high. She added that the Fed will need to tighten policy somewhat further to lower inflation and that raising rates again will reduce the risk of more action in the future.

She did, however, add that there is no decision yet on the need for a July rate hike.

San Francisco head Daly stated that economic momentum continues to build and that the bank is likely to need a couple more rate hikes this year. She added that with the labour market still strong and inflation high, the risks of doing too little are outweighing the risks of doing too much.

Atlanta Fed President Bostic adopted a more dovish stance with comments that the underlying data on inflation is telling a very positive story.

US yields moved lower in Asia on Tuesday as the 10-year yield traded below 4.00% and the dollar dipped further to lows at 140.60 before a recovery to 140.85.


Sterling was unable to make headway after Monday’s European open and posted significant losses during the session. There was a reluctance to extend long positions ahead of the UK labour-market data and Sterling dipped back below the 1.2800 level against the dollar which triggered further selling.

Bailey commented that inflation and wage increases at current rates are not consistent with the inflation target. He did, however, add that underlying inflation pressures are set to recede and that some of the previous tightening has yet to hit the UK.

In this context, the bank is paying particular attention to wages growth and services-sector inflation.

Sterling found support close to 1.2750 against the dollar and posted a fresh advance to around 1.2830 at the European close. As the dollar faded, Sterling secured a fresh 14-month high just above 1.2850 while the Euro edged higher to just above 0.8550.

The UK unemployment rate increased to 4.0% from 3.8% according to the latest data with a small employment decline for June, but the headline annual increase in wages strengthened to 6.9% from 6.7% with an underlying increase of 7.3%. The wages data maintained expectations of a hawkish Bank of England policy stance with Sterling posting a fresh 14-month high close to 1.2900 against the dollar and the Euro back below 0.8550.


Swiss sight deposits declined to CHF486.6bn in the latest week from CHF491.9bn previously which suggested that the National Bank was still happy to see a net tightening of liquidity conditions.

The franc lost ground at times during Monday, but was broadly resilient with the Euro settling just above the 0.9750 level while the dollar failed to hold above 0.8900 and retreated to 0.8875. The franc held firm on Tuesday with the dollar below 0.8850.

Technical Levels 

Tables 1 (172)

Economic Calendar

Fx Daily Calendar 11072023



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