EUR/USD strikes two-month low ahead of Jackson Hole Symposium

The US dollar ticked higher on Tuesday as investors grew cautious ahead of the Federal Reserve’s latest annual summit.

Sterling is mostly subdued so far this morning, with GBP/EUR up at €1.1749 and GBP/USD down at $1.2714. GBP/CAD is also slightly weaker at CA$1.7220, as are GBP/AUD and GBP/NZD at AU$1.9803 and NZ$2.1415, respectively.

Coming up, will some underwhelming PMI data from the UK and Eurozone apply pressure to the pound and euro this morning?

What’s been happening?

The US dollar initially stumbled yesterday as an upbeat market mood limited demand for the safe-haven currency.

However, USD exchange rates bounced back later in the session, with investors turning cautious ahead of the start of the Federal Reserve’s annual Jackson Hole Symposium on Thursday.

The uptick in the US dollar pulled the euro lower on Tuesday as a result of the negative correlation between the pairing, with the EUR/USD exchange rate even sliding to a new two-month low.

At the same time, the pound was left subdued yesterday, amid the absence of any notable GBP data and UK economic jitters.

What’s coming up?

Turning to today’s session the highlight will be the latest PMI figures from both the Eurozone and UK.

Up first will be the Eurozone’s PMI releases. There has been a sustained deceleration in the bloc’s private sector over the past few months, with service sector activity grinding to a halt and the manufacturing sector now deep in contraction.

If this trend continued into August, it’s likely the euro could come under some notable selling pressure today.

The UK’s PMI figures are expected to be almost as gloomy this month. While a slightly stronger performance by the UK’s vital services sector may allow the pound to fare a little better than the euro, Sterling is still likely to face some headwinds.

Today will also see the publication of the latest S&P US PMI releases. While these aren’t as influential as the ISM figures, they could still trigger some movement in the US dollar this afternoon.