21/11/2022

Sterling aided by better than expected Retail Sales

GBP Sterling ended the week on the backfoot against the US dollar but rebounded against the euro as a shift in general risk sentiment and market reaction to the Autumn Budget contributed to Sterling volatility. Despite a mixed reaction to the government’s budget, the pound was seen lower against its peers on Friday morning as the … Read more

18/11/2022

Autumn Budget – a mix bag of tax rises and financial support for millions

GBP The British pound was lower against the US dollar by 1% after the UK government announced in its Autumn Budget the introduction of new tax hikes and spending cuts. The new measures are a mix of higher costs for households and increased support for the most vulnerable. A key objective behind the Autumn Statement is to stabilise … Read more

17/11/2022

The UK awaits Chancellor Hunt’s Autumn Statement

USD Yesterday saw the release of Retail Sales in the US and the Department of Commerce (DoC) reported that sales grew the most in eight months, with readings hitting 1.3% month-on-month against the projected 1%. Retail Sales in the control group, used to calculate GDP, expanded by 0.7% month-on-month against 0.3% foreseen. Although inflation data … Read more

16/11/2022

UK inflation data beats market expectations rising to 11.1%

USD The dollar fell during early trading as PPI inflation came in lower than expected. The PPI figure came in at 0.2%, lower than the 0.4% the market had forecast. The Producer Price Index measures the inflation facing domestic producers of goods and services and is therefore considered to be another measure for consumer-facing inflation (CPI). … Read more

14/11/2022

Sterling gained for the second consecutive day against USD

GBP The pound gained for the second consecutive day against the US dollar on Friday to hit fresh two-week highs and this resulted in the largest single day rise in the pair since 2017. UK GDP has shown a 0.2% contraction in the third quarter, significantly above the -0.5% market consensus following a 0.2% advance … Read more

11/11/2022

US CPI data signals a slowdown in interest rates hikes

USD The dollar fell sharply on Thursday after US inflation data came in softer than expected and suggested underlying inflation had peaked. The CPI reading for October signals to the market that the Federal Reserve could look to slow the pace of its interest rate hikes. The slowing Consumer Price Index sparked big gains in major foreign … Read more

09/11/2022

USD weakness due to slowdown in labour market

GBP This week has seen Sterling gain and lost ground against the US dollar after strong US jobs data release. Yet higher unemployment data rising 0.2% indicated a slowdown in the US labour market, resulting in dollar weakness. Yesterday saw the EU year-on-year Retail Sales data reported at -0.6%, which was lower than the expected contraction … Read more

04/11/2022

UK interest rates reach 3%, the largest increase in 33 years

GBP Sterling fell against its peers on Thursday despite its largest single interest rate increase for thirty-three years, as the Bank of England warned of a deeper recession than previously thought and cautioned markets that it would unlikely raise interest rates to 5%. The BoE increased interest rates by 75 basis points to 3%, an increase … Read more

03/11/2022

US interest rates reach 4%

USD The dollar firmed on Wednesday evening following the Federal Reserve’s latest interest rate decision, which saw US interest rates increased to their highest level since 2008. As widely expected, the Fed voted unanimously to increase interest rates by 75 basis points for the fourth consecutive meeting lifting the US interest rate to a range … Read more

27/10/2022

The ECB’s interest rates decision expected today

GBP Following the appointment of the UK’s new Prime Minister, Sterling has found much needed stability in recent days and returned to pre mini-budget levels. There are still many issues that need to be addressed, the main one being the government’s plans to plug the current £35bn debt hole. Yesterday, current Chancellor Jeremy Hunt and PM Rishi … Read more

26/10/2022

Fears of a EU recession are easing after gas prices fall

GBP Sterling gained back some of its losses yesterday mainly against the US dollar as Rishi Sunak was officially announced as Prime Minister. Sunak is the UK’s third PM in just two months. Markets will be hoping that Sunak offers a steady hand as Britain faces mounting economic problems. In his first speech as Prime … Read more

25/10/2022

New Prime Minister brings confidence to the markets

GBP Yesterday the market took time to digest the news that the UK will have its third Prime Minister for the year with former Chancellor Rishi Sunak winning the race to become the next PM after Boris Johnson pulled out of the race and Penny Mordaunt also conceded. This saw the pound gain against the … Read more

18/10/2022

The pound rallied more than 2% against the US dollar

GBP Yesterday the pound rallied more than 2% against the US dollar, bolstered by risk-on mood and news that the UK government will abandon most of the economic plans put forward a few weeks ago which sent markets into turmoil and prompted the Bank of England to action an emergency intervention. Jeremy Hunt, who was appointed as … Read more

17/10/2022

Markets expect an aggressive decision from the BoE next month

GBP The Bank of England introduced an emergency bond-buying scheme which saw over £8bn in purchased bonds coming to an end last Friday. The purpose of the scheme was to settle markets after the government’s release of its ‘mini budget’ that recently saw a dramatic market sell off causing GBP/USD tanking to a record low of 1.03 and … Read more

14/10/2022

Markets are now pricing in a full U-turn on UK corporation tax

GBP Sterling found some much needed relief against a basket of currencies on Thursday following reports the UK government were set to reverse some aspects of its contentious mini-budget. According to numerous news outlets, the government were considering which parts of the tax cutting package which sent financial markets into turmoil last week can be ignored. … Read more

12/10/2022

The Bank of England reiterates the end of its emergency support program

GBP Yesterday the pound plunged against the US dollar after further concerns were raised by the IMF regarding the UK government’s mini budget. The Bank of England announced early on Tuesday that it will enact a further round of bond-buying to try settling the market. Investors have been selling off government bonds as they are worried about … Read more

06/10/2022

Prime Minister fails to re-assure markets with conference speech

GBP Sterling ended a recent run of appreciation on Wednesday declining 2% against the US dollar and 0.5% against the euro as Prime Minister Liz Truss delivered her speech at the annual Conservative party conference in Birmingham. Investors had hoped that Truss would use the conference as an opportunity to re-assure markets of the government’s fiscal … Read more

04/10/2022

Government U-turn on tax helps Sterling recovery

GBP The pound recovered yesterday after the Chancellor Kwasi Kwarteng confirmed he would bring forward the publication of his fiscal plan to try to restore confidence in the market. The plan had originally been scheduled for release on the 23rd of November, but will now be delivered later this month. The Treasury’s plan will also be accompanied by … Read more

30/09/2022

The Bank of England to reduce gilt holding by £80bn

GBP Sterling reversed some of its recent losses against both the euro and US dollar on Thursday rallying by 1% following the Bank of England’s recent intervention in the bond market. According to the BoE, the central bank will keep its goal to reduce its £838bn of gilt holding by £80bn over the next year, … Read more

29/09/2022

Bank of England to purchase £65bn worth of government debts

GBP The pound rose against both the euro and US dollar after the Bank of England announced that it would start buying long-dated bonds, on a temporary basis, in order to calm the market chaos. However near-term volatility is expected to remain elevated. The move was made by the BoE after all the distribution caused … Read more