Apologies for the delay, and thanks for rolling with the late post, that bank holiday and a full week’s calendar have packed our FX weekly outlook with fresh signals and volatility drivers. Here’s the updated rundown on what’s moving GBP, EUR, and USD going into the second half of the week.
Key Data Releases (Tuesday to Friday)
- Tuesday (26 Aug): RBA minutes, BoC’s Governor Macklem speech, US durable goods
- Wednesday (27 Aug): Australia CPI, German consumer sentiment
- Thursday (28 Aug): US Core PCE and prelim GDP, plus global central bank meetings (BoK, BSP)
- Friday (29 Aug): US core PCE index, the Fed’s preferred inflation gauge, U.S. personal income & spending, alongside global GDP updates (US, Canada, India, EU)
EUR Outlook
The euro is awaiting a fresh direction this week, with sanely lower inflation but still-lagging growth. Canada and Central Asia’s data are on the sidelines, but markets will react if Canada’s CPI surprises. More directly, global central bank tone, especially from Asia, can shift the EUR risk appetite. Expect modest moves unless eurozone data surprises emerge later.
GBP Outlook
Sterling’s week kicked off behind schedule, but it now faces pressure from soft spending data and heightened concerns over the cost of living. The UK bank holiday blurred domestic signals for much of the start of the week. Watch for late-week retail or earnings from exposure sectors (e.g., food, retail stocks) to reset market sentiment, especially in light of surging food inflation.
USD Outlook
The US dollar is navigating a major wave of data, the Core PCE on Thursday/Friday is the crown jewel of the calendar. It’s the Fed’s favorite inflation measure and will shape expectations for the September meeting. Supporting that, GDP flash (Thurs) and durable goods (Tue) offer a growth context. Expect significant reactions, especially in USD/GBP and USD/EUR, and particularly post-PCE.
Global Currencies & News
- AUD / NZD: RBA minutes (Tue) and Australia CPI (Wed) determine antipodean FX courage.
- JPY & CAD: Canadian inflation midweek could influence BoC outlook; yen remains risk-sensitive.
- Geopolitics: A high-stakes Ukraine summit has just concluded, and Trump’s call to fire an ex-Fed Governor tipped markets toward safety, adding pressure on rates and lifting yields. These narrative risks still ripple through FX.
- Markets Note: Monday’s US equity pullback reflects underlying caution ahead of the packed calendar, consistent with ETF and sentiment flows into USD.
- Food Prices: UK food inflation at a 17-month high and lingering consumer strain remain a persistent drag on domestic demand.
Fact of the Week
Eggs, butter, and chocolate prices have driven UK food inflation to its highest in 17 months, now running at 4.2%, pulling overall inflation toward 3.8%. That’s well above the BoE’s 2% target, and adding fuel to the fire ahead of next week’s policy reset.
🔑 How August Exchange Delivers Value
In weeks like this, volatility creates both risks and opportunities. At August Exchange, we help clients turn market noise into structured strategies that protect margins, reduce uncertainty, and create smoother cash flows.
Here’s how this plays out across our different client groups:
- Import/Export Businesses
Imagine a UK-based importer paying €2 million quarterly for European goods. A 1% move in GBP/EUR shifts costs by £17,000. Using forward contracts, we help clients lock in exchange rates months in advance, protecting them from unexpected spikes and allowing accurate costings for their next container load. - E-Commerce and Retailers
For online sellers receiving payments from global marketplaces in USD, EUR, or AUD, delays and hidden conversion fees can eat into margins. By offering named multi-currency IBANs and local collection accounts, clients receive funds faster, in the original currency, and convert only when conditions are most favourable, boosting profits on each sale. - Corporates with Overseas Payroll
Take a sports management firm paying salaries in multiple currencies. A shift of just 0.5% on USD payrolls worth $5 million annually means £20,000 extra in costs. Through a hedging programme combining spot and forward contracts, we help smooth monthly payroll outflows, ensuring athletes and staff are paid on time without exposing the business to exchange rate swings. - High-Net-Worth Individuals & Family Offices
Consider a family office planning to repatriate $10 million from overseas investments. A 2% move in GBP/USD could mean a difference of £160,000. Using staggered forwards or structured hedges, we help phase conversions at advantageous rates, balancing protection with flexibility. - Property Transactions
For buyers settling in Dubai or Spain, timing the completion payment is critical. A sudden 1.5% swing in GBP/EUR on a €500k property can add £6,500 overnight. With market orders and forward contracts, clients lock in their purchase price, avoiding last-minute surprises and ensuring certainty when signing.
Every basis point matters. Whether protecting corporate margins, securing family wealth, or enabling international expansion, our tailored FX strategies are designed to add value beyond the simple rate.
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