Currency Market Trend Analysis: August 1, 2016

USD - U.S. Dollar

The dollar is recovering from one of the worst weeks it has had in three months. Due to reports showing the U.S. economy grew at a flat annual rate of 1.2 percent during the second quarter, and no interest rates were hiked during last week’s Federal Reserve meeting.

New data on consumer spending and inflation is due on Tuesday and nonfarm payrolls on Friday. Once this information is released, the possibility of a Fed rate hike could be in the works for later this year in November around election time. 

GBP - British Pound

The pound slipped against the dollar and euro on Monday. Latest surveys show that the UK manufacturing activity has declined at the fastest pace in more than three years after the Brexit vote.

"The overall negative tone of the survey reinforces the case for a monetary loosening at Thursday’s Monetary Policy Committee meeting," said Scott Bowman, an economist at Capital Economics. Which could be a turning point for the pound later this week. 

EUR - Euro

The euro has quickly managed to slightly show signs of strength against the U.S. dollar after economic reports showed unfavorable for U.S. on Friday. On Monday, trading euro against the U.S. dollar is now at 1.11 from 1.09 on Wednesday last week.

On Friday when bank stress tests were released, it was revealed that they were for the most part in better condition than expected and could possibly face another sharp economic plunge. This brings some relief but surrounds the economy’s future with uncertainty.