Market Beat

August 2018

EURUSD volatility on the rise in thin summer markets

  • The US-Turkey spat had a contagion effect, sending EURUSD to fresh yearly lows, following concerns over many of the European banks’ exposure to Turkey. EUR broke the key 1.1500 level, dropping down to a low of 1.1301 in thin liquidity, before consolidating back higher as the markets calmed.
  • The dollar subsequently lost ground into the Jackson Hole as central bankers met amidst US president Trump’s criticism of Fed rate hikes.
  • Fed’s Powell cemented the September rate hike but downplayed risk of overheating, signalling a gradual process of normalisation ahead. This allowed stock markets to continue on one of the longest bull runs, and USD to reverse gains – shorts in EURUSD scrambled back through 1.1500 and EUR rallied all the way to 1.1700 in the face of EURJPY demand.
*The true rate used below is a blend of EBS Market and EBS Direct rates, and account for outlier price submissions and mismatches.
*Bubble sizes represent relative trade sizes for the period selected (1 Aug - 30 Aug 2018)
*High/Low prints are for indication only
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