By Enrique Diaz-Alvarez, Chief Financial Risk Officer of International Payment Company Ebury

Trump’s attempt to remove Fed governor, Lisa Cook, is the most immediate attack on central bank’s independence since the 1970s, but the dollar seems to be dealing with it calmly. Although it retreated over most of the coins last week, the moves were restrained, leaving the American currency right in the middle of the narrow trading range that maintains consistently throughout the summer.

Undoubtedly, there were also evidence from the economic data that suggest that the feared slowdown in the economy may have ultimately exaggerated. Overall, it was a quiet week in the currency markets, with no clear trends, where the coins moved significantly only due to national, idiosyncratic agents.

The current trading week is shorter in the US due to Labor Day holiday. However, an unusually rich series of macroeconomic data is expected to be published. The most crucial will be the US -based August market report, which will be published on Friday.

Analysts have revised their expectations after July’s very weak report, but their estimates are still compatible with a moderate job creation and only a slight increase in unemployment. The replacement of the Bureau of Labor Statistics office by a dedicated Trump partner adds an additional dimension to uncertainty. The preliminary report on Eurozone inflation for August on Tuesday will be the second main focus for investors this week.

Gbp

The week was very quiet about remarkable macroeconomic publications or new monetary policy, and the pound reflected this climate with lazy summer transactions. There was a more interesting action on the Gilt Market market, where yields of long -term bonds continue to grow relentlessly. This is, of course, a general trend in state debt markets, but British yields remain the highest in the G10 team. The labor government’s inability to control the costs, amid persistent surprises in inflation, certainly does not help. Markets invoice less than 50% chance even for a single interest rates this year by the Bank of England, but the steady increase in medium -term and long -term interest rates threatens to make policy moves less effective regardless of it.

EUR

The late worldwide sale of long -term government bonds also affects the eurozone, although the influence there depends very much on the country. Investors are focusing on France, which combines a dire financial image with political instability, but the yields of German 30 -year bonds have also reached a high 15 -year -old last week. While the euro continues to benefit from the US -based concerns, it is restrained by the constant sluggish growth and the low short -term interest rates that accompany it. This week’s main publication is the preliminary report on August inflation, which is expected to show constant convergence on the ECB’s goals – something rare among the large economic areas.

USD

While last week’s data generally surprised positively and gave the image of a durable economy, all bets are open before the critical report on employment this Friday. A weakened labor market is the only reasonable justification behind the mild federal reserve and the announcement of a September interest rate reduction, and if the data shows durability, such a move can be perceived as an indication that the central bank succumbs to the uninterrupted pressure on Trump. In the meantime, the attempt to dismiss Lisa Cook by Trump is likely to develop into a long legal process. While the short -term impact is limited, the message sent to other Fed rulers is clear. Long -term interest rates are the key to Trump, as they determine mortgage interest rates and, therefore, home markets, and they remain high even as the expectations of interest rate reductions are increasing.