August 21, 2025

“Fed independence is back in question with Trump’s calls for one of the governors to resign, and markets are looking ahead to some PMI data and the Jackson Hole symposium today.”

Sam Cornford – Head of Trading

USD

The dollar has steadied this morning ahead of today’s PMI data and tomorrow’s Jackson Hole speech from Chair Powell. Trump turned his attention away from Powell yesterday and instead the administration targeted Governor Lisa Cook instead, accusing her of mortgage fraud several years ago and calling for her resignation. Whether true or not, it certainly looks like a strategy to replace another Fed official with someone more amenable to Trump’s demands to lower rates. The dollar managed to shrug that off overnight, though, helped by some Fed minutes that suggested officials attached greater risks to inflation rather than jobs. However, there is a good chance that this balance has shifted, and we might get some clues on this from the Fed’s Bostic later today, ahead of Powell’s keynote speech tomorrow. In terms of data, we get the August PMIs and some jobless claims data this afternoon. The composite PMI index is expected to cool a touch from 55.1 to 53.5.

GBP

Sterling is heading for its fourth straight day of losses versus the dollar this morning. GBPEUR also struggled yesterday despite an initial post-CPI bounce, as markets appeared to come to the conclusion that the higher-than-expected figure did not materially change the story for the Bank of England, primarily because it was driven by an airfares component that was skewed by the timing of school holidays. The man event today is the August PMI index, where the consensus is for a stable 51.6 (i.e. economic stagnation).

EUR

EURUSD has purely followed the dollar so far this week, but PMI data this morning is providing some support for the euro. The results for France and Germany have been better than expected but still rather depressing, at 49.8 and 50.9 respectively. In other words, the French private sector is at a standstill and in Germany there is some very modest growth. The overall eurozone index is expected at 50.6. Consumer confidence data is also due this afternoon.

Markets

Most major stock indexes are having a bad few days, particularly in the US, where the Nasdaq has fallen 2.5% over the last week. There are two outliers, however: the UK’s FTSE 100 jumped 1% yesterday and is rising for a fourth consecutive day this morning, while China’s CSI 300 is now up nearly 3% in the past week.

Main Economic Events (All Times CET)

8:00am: Norway GDP
10:00am: Eurozone PMIs
10:30am: UK PMIs
2:30pm: US Jobless Claims
3:45pm: US PMIs
4:00pm: Eurozone Consumer Confidence

To learn more about Ballinger Group, please visit our website or our LinkedIn page.