23/09/2022

Bank of England raises interest rates to 2.25%

GBP The Bank of England raised its key interest rate to 2.25% from 1.75% yesterday and stated it would continue to “respond forcefully, as necessary” to inflation, despite the economy entering a recession. The market reaction was to sell the pound with Sterling falling by over half a cent against the US dollar. Against the euro the … Read more

21/09/2022

UK government to deliver ‘mini’ Budget this Friday

GBP Last week saw UK Retail Sales decline over 1.6% adding further pressure to the economy with the outlook of a ‘gloomy’ winter ahead. Focus will be on the government’s mini budget speech this Friday as consumers hold on to the chance of a manageable energy price cap to halt further price increases. The pound continues … Read more

20/09/2022

UK consumers cut back on spending amid soaring inflation

GBP Sterling fell to fresh lows against both the euro and US dollar on Friday as the latest Retail Sales data stalled. Consumers cut back on spending amid soaring UK inflation. According to data released by the Office for National Statistics, Retail Sales fell in August by 1.6% month on month – the biggest decline since … Read more

14/09/2022

UK inflation unexpectedly levels down

USD Surprise US inflation data rattled markets yesterday as CPI data showed inflation higher than expected. US headline CPI inflation rose 8.3% year-on-year in August, defying expectations for a reading of 8.1%. However the figure was still lower than July’s 8.5%. More importantly, Core CPI rose 0.6% in August, double the 0.3% the market was expecting. The Federal … Read more

13/09/2022

EUR and USD trading at parity

GBP The pound hit its lowest level against the euro yesterday since 2021 as investors bet the European Central Bank (ECB) will continue to raise interest rates aggressively at its future policy meetings. The ECB will need to continue on its course to try curbing record inflation in the Euro bloc. The pound slumped to 1.1464 … Read more

12/09/2022

Sterling has been influenced by broader risk appetite this year

GBP The pound enjoyed a mixed week, losing ground against the euro but gaining as the US dollar finally saw some weakness on Friday. Sterling pushed lower earlier in the week following Liz Truss’s appointment as the new Prime Minister and the early week’s decline saw Sterling hit a 37-year low trading as low as … Read more

07/09/2022

Sterling rallies following the announcement of Truss as Prime Minister

GBP Sterling gained on Tuesday after the new UK government stated it would deliver a significant support package for households facing surging energy bills. New Prime Minister Liz Truss would effectively cap household energy bills near current levels, a move economists believe could cause inflation to fall from its peak. Furthermore, a package of £40bn is reportedly … Read more

06/09/2022

Former Foreign Secretary Liz Truss named as new Prime Minister

GBP Sterling found some relief on Monday following the news that Liz Truss had secured a Conservative majority to lead the next Tory government. Truss beat rival Rishi Sunak with 57% of the votes to become the new Conservative leader. The news to appoint Truss as the next Prime Minister provided a much needed boost … Read more

05/09/2022

US employment data helps relieve pressure on the Fed

USD Non Farm Payrolls employment report was released on Friday and the data showed an increase of 315,000 jobs last month after surging 526,000 in July. The disappointments are with the Average Hourly Earnings which rose 0.3% compared with expectations of 0.4% and the Unemployment Rate which missed predictions of 3.5% against 3.7% actual. However, the … Read more

02/09/2022

Last day for Conservative members to select a new Prime Minister

EUR The European Central Bank looks set to deliver another large interest rate hike next Thursday. The plan appears to be to tighten its monetary policy before economic conditions get any worse. With inflation approaching double digits the question now seems to be whether opting for a 50 basis points hike or a more aggressive 75 … Read more

31/08/2022

US job openings data points to a strong labour market

USD The dollar continued to trade close to twenty-year highs against both Sterling and the euro on Tuesday as markets began pricing in additional interest rate hikes from the Federal Reserve. The dollar garnered a wave of support on Friday when Fed Chair Jerome Powell delivered a hawkish tone signalling to markets that interest rates … Read more

22/08/2022

UK inflation hits double digits for the first time in four decades

GBP Last week saw UK inflation hit double digits for the first time in forty years with a projection of 13.3% inflation for the end of 2022. UK consumer confidence remains at all times low and energy prices continue to surge further applying pressure on the Bank of England. The markets are pricing in a 50 basis … Read more

19/08/2022

USD continues to maintain its strong position against majors

USD Yesterday the dollar continued to maintain its support moving to monthly highs against most major currencies. This is mainly due to markets having changed their minds regarding the latest announcement from the Federal Reserve. The Minutes from the latest FOMC Meeting published on Wednesday were initially seen as dovish, particularly considering policymakers expressed their … Read more

13/05/2022

UK GDP growth disappoints as quarterly figure shows little progress

GBP UK GDP for the first quarter came in below expectations, with the quarterly figure rising 0.8% against the 1.0% expected. Given last week’s monetary policy report from the Bank of England, this further reiterates the view of policymakers that growth will slow down throughout the year. Economic growth will take a bigger hit in … Read more

23/03/2022

UK Spring Statement 2022 and its potential impact on GBP

In the backdrop of the worst inflation in decades reaching the 6.2% mark, the war in Ukraine and rising living costs, the Chancellor of Exchequer Rishi Sunak delivered his Spring Statement today. Mostly expected, the new measures involve around the key issues the UK population is facing. The UK economy is forecast to grow by … Read more

08/03/2022

Investors rushing to safe-haven US dollar

EUR The euro recovered slightly against both the pound and dollar on Monday as headlines stated that Russia would immediately cease its military campaign if Ukraine agreed to a list of demands. Kremlin spokesperson Dimitry Peskov said Russia would withdraw forces if Ukraine ceases military action, changes its constitution to enshrine neutrality, acknowledges Crimea as Russian territory, … Read more

07/03/2022

European markets eager for diplomatic solution with Russia

EUR The safe passage of civilians from Ukraine’s eastern port city of Mariupol was “halted” on Sunday for a second consecutive day, after the agreed ceasefire was violated within hours of its planned implementation. Ukrainian President Volodymyr Zelenskyy warns that Russian forces could be planning an attack on the key port city of Odessa. The … Read more

17/02/2022

Scepticism at Russia’s withdrawal from Ukraine border

EUR supported by ease of geopolitical tensions while GBP and USD are facing domestic challenges. GBP UK inflation hit a new thirty year high yesterday, as consumers continued to feel price pressures in January. CPI rose 5.5% (YOY) in January, the highest reading since March 1992. This reading resulted in four consecutive months of rising … Read more

29/10/2021

Autumn Budget 2021: what happened and how will the pound react?

Finance minister Rishi Sunak unveiled the contents of his famous red briefcase in the House of Commons on Wednesday – and he was in a bullish mood. Back in March, the Chancellor of the Exchequer’s Spring Budget statement painted a bleak picture of the state of the UK’s finances, as the nation prepared to take … Read more