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Renewed focus returns on US data after Powell's comments

EURUSD
  • Despite the whip around following Powell's comments yesterday, the correlation between STIR and EURUSD remains intact.
  • This is one of our favourite charts right now and shows how interest rate differentials have been the main driver of EURUSD over recent months.
  • We would expect this correlation to remain strong and note that following Powell's comments yesterday there is a renewed focus on US data once again (before Powell's comments it had looked as though data would take a back seat).
  • With that in mind today we have the ISM manufacturing print at 15:00GMT with ADP employment before that at 13:15GMT.
  • There will also be increased focus on the labour market report on Friday.

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