Psychology for major markets Aug 13

EUR/USD – EUR/USD back above 1.17 as the market sees US July CPI as soft enough to guarantee a September Fed ease.

USD/JPY – USD/JPY slipping lower as market anticipates Fed easing, but equity strength continues to prevent JPY gains on crosses.

EUR/GBP – GBP supported by close BoE decision with EUR/GBP drifting lower into the low 0.86s helped by labour market data showing still strong earnings growth.

AUD/USD – Found support above key 0.64 area and holding in mid range near 0.65, but downside risks increasing with RBA cuts looking more likely and equities looking more fragile.

Equities – S&P recovered from the post-employment lows to make new all time highs, but downside risks persist as evidence of US slowdown emerges, with impact of tariffs still to come.