The Morning Update

The USD edges higher, oil prices hold steady, equity markets gain, and US yields are mixed ahead of the Fed Chair speech on Friday. Currency markets are sidelined within weekly ranges as investors remain cautious ahead of Fed Chair Powell's speech on Friday. Equity markets rallied globally on the Nvidia effect after its bullish sales outlook helped European chipmakers rally and saw tech outperform in Asia. Concerns in China continue as its economy struggles to gain momentum as local government financing vehicles' health impacts global risk sentiment. European natural gas prices tumbled on expectations the Australian liquefied natural gas labor dispute will be resolved. In focus today US Durable Goods, Initial Jobless Claims, and Jackson Hole Symposium updates will help provide intraday direction to currency markets.

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In other news. BRICS leaders invite 6 nations including Saudi Arabia to join the bloc. Nvidia's AI boom exceeds Wall Street's loft expectations-FT. Wagner's Prigozhin, in a fatal plane crash, Russian officials say. After treated water is released from Fukushima, China suspends all seafood imports from Japan. Stimulus or bust: Investors staying out of China until the spending starts-Reuters. Boeing says a new 737 Max flaw will slow airplane deliveries. Indian spacecraft makes historic landing at Moon's south pole.

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In currency markets. The USD edges up ahead of the Jackson Hole Symposium. Bearish bets on Asian currencies increase as concerns over slowing growth in China continue to weigh on risk sentiment. Commodity currencies retreat on a combination of China demand concerns & a firm USD into Jackson Hole. CNY is flat, while Asian currencies slipped 0.15% on average vs. USD. Trading currencies come under renewed selling pressure with ZAR tumbling 1%, while NZD, SEK & NOK fell 0.6%, AUD & JPY weakened 0.4%, and MXN & CHF slipped 0.25% vs USD.

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Oil prices are steady as investors await the US Fed Chair's comments on Friday for clues on interest rate moves. CAD holds on to Wednesday gains after testing 3-month lows of 1.3603, outperforming its peers in early trading. Wednesday saw CAD retail sales growing by 0.1% in June, while ex-autos fell more than expected and showed signs of weak consumer spending highlighting that BoC rate hikes are impacting the economy. Today US data will help drive direction, but we expect the loonie to remain on the back foot until the Fed Chair's speech on Friday.

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EURCAD holds steady as non-USD currencies pairs hold steady ahead of the start of the Jackson Hole Symposium today.

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EUR steadies in at the mid-point of the weekly range ahead of US data and Jackson Hole. Euro fails to break through 1.0900 as the USD remains firm on the combination of ongoing risk concerns from China's economic slowdown and on expectations of a hawkish Fed at the Jackson Hole Symposium. Domestically disappointing PMI data from Germany & the Eurozone increases expectations the ECB will take a less hawkish stance on interest rates beyond its September meeting. We expect to see the Euro remain stalled ahead of Friday's Fed Chair's speech.

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GBPEUR continues under selling pressure which has seen August gains being erased as expectations that the BoE could pause its rate hikes beyond September.

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GBP drops below 1.2700 as the USD recovers and increases dovish BoE expectation. The USD regains strength heading into the Jackson Hole Symposium speech by the Fed Chair with expectations the central bank will maintain its hawkish stance. Domestically the UK's weak PMI data has led to dovish BoE expectations which is putting increased selling pressure on the GBP with some analysis calling for a retest of 1.2550 vs. USD. Intraday US data releases and the Jackson Hole Symposium will help drive the intraday direction for the pound.