05/08/2022 Bank of England increases interest rates GBP Sterling was left to recover following the latest interest rate decision from the Bank of England yesterday. As expected, the central bank rose interest rates by their largest margin in 27 years (50bps) bringing the base rate to 1.75%. This is the largest hike since 1995. Eight of the nine members voted for a … Read more
04/08/2022 Sterling focused on Bank of England announcement USD The dollar gained on Wednesday as business activity in the U.S. services sector showed an expansion in July from June. According to the data, ISM Services appreciated to 56.7 from 55.3 in June, surpassing market forecasts of 53.7. The data was supportive for the dollar which has faced selling pressure over the last week … Read more
03/08/2022 Markets await Bank of England announcement GBP The pound has started August strongly posting gains against all major currencies but could fall if the Bank of England disappoints markets on Thursday. Money markets have priced in a 50 basis points rise as the bank looks to fight rising inflation which is currently at record highs. On the downside, there are some … Read more
02/08/2022 USD dropped sharply after a cautious tone from Fed Chair Powell GBP On Monday Sterling rallied against the euro and US dollar. The British pound wasn’t fazed by manufacturing output and new orders declining at the fastest rate since May 2020. UK Manufacturing PMI fell last month to 52.1 from 52.8 in June, revised down slightly from a preliminary July reading of 52.2. All eyes are … Read more
01/08/2022 GBP up against the dollar and euro as it starts this week USD The dollar starts the week weaker against a basket of currencies after markets continue to bet that the Federal Reserve will ease its aggressive rate hiking cycle with threat of recession looming. The dollar index has dropped back to the low level of 105.80 which has not been seen since 5 July. This is … Read more
29/07/2022 GBP extended its weekly advances amidst a positive market reaction GBP Sterling moved towards a three-month high versus the euro and a one-month high against the US dollar as the more positive mood within broader markets encouraged investors back into currencies considered riskier during uncertainty. The British pound extended its weekly advances amidst a positive market reaction following the Federal Reserve’s decision to raise interest … Read more
26/07/2022 Investors gear up for the Fed’s interest rate decision USD Yesterday was a relatively quiet day for markets as investors gear up for tomorrow’s Federal Reserve meeting and rate decision. An increase of 75 basis points is the expected move but should the decision deviate from this number, we should expect volatility. EUR Yesterday’s main headlines largely surrounded the euro as Russia confirmed there … Read more
25/07/2022 Data on Friday showed a contraction in US and EU business activity EUR Last week was a turbulent one for currency markets as shock decisions from the European Central Bank and poor inflation data in Europe caused market volatility. ECB President Lagarde, confirmed last week, that the bank is set to raise interest rates by 50 basis points, higher than the 25 basis points the market expected. … Read more
22/07/2022 European Central Bank to increase interest rates by 50 bps EUR The euro rallied to fresh highs against both the US dollar and Sterling on Thursday as the European Central Bank delivered its first rate hike in eleven years. However EUR fell in the afternoon as concerns regarding the Eurozone’s economy weighed on the currency. Having started the day firmer on Thursday, the euro rallied … Read more
21/07/2022 Italian political uncertainty weighs on EUR before ECB meeting GBP The pound remained stable after the release of UK inflation data on Wednesday. Inflation rose to 9.4% year-on-year beating market expectations of 9.3%. Core CPI – which strips out external drivers such as fuel – rose 5.8% year-on-year, which was in line with expectations and a touch lower than May’s 5.9%. The data also … Read more
20/07/2022 Today UK inflation is at a forty-year high EUR Yesterday saw the US dollar give back gains posted in the past week as optimism grew in Europe. Reports suggested the European Central Bank were set to discuss the idea of a 50 basis points interest rates hike at their meeting this week, much to investors’ surprise. The main concern for Europe is now … Read more
18/07/2022 The European Central Bank to decide on interest rates hike GBP The pound climbed to its highest level against the euro last week but remained under pressure against the US dollar. Sterling benefitted from stronger than expected GDP data which came in above expectations for the month of May. The pound could rally further against the euro and regain its losses against the dollar with … Read more
15/07/2022 The attempted resignation of Italian PM complicates things for the ECB GBP The resignation of UK Prime Minister Boris Johnson has added complications to the fight against inflation the Bank of England has on its hands. Without the prospect of any alterations to fiscal policy, it’s entirely on the BoE’s shoulders to manage the economy over the next two months before the next UK leader ascends. … Read more
14/07/2022 Upbeat UK GDP data for May was reported yesterday GBP Yesterday we experienced some positivity for Sterling following upbeat GDP numbers for the month of May. GDP rose 0.5%, up from the previous reading of -0.3%. Understandably it was only one reading but Sterling found comfort in this after recent weeks of volatility. Should we continue to see an increase in GDP, it may … Read more
13/07/2022 Markets fear the energy crisis will push the Eurozone into recession EUR The euro remained under pressure for most of yesterday and teetered on the brink of parity against the US dollar. There are a number of reasons why the euro has weakened significantly but the most recent cause is the fear of an energy crunch in the Eurozone. The Nord Stream 1 pipeline, which brings … Read more
12/07/2022 PM’s resignation adds to the uncertainty around the UK economy GBP Yesterday we saw the pound dropping to a two-year low – traders moved to the sidelines while the Conservative leadership contest kicked off to determine the next Prime Minister. Johnson’s resignation has deepened the uncertainty in the UK economy, taking into consideration the soaring inflation and recession risks. GBP/USD was trading at 1.1867 which … Read more
11/07/2022 Politics as the key driver for Sterling this week GBP Political uncertainty is the hot topic in the UK following last week’s resignation of Boris Johnson. Up to ten conservative MP’s have now thrown their hat in the ring to become the new Conservative leader with no clear front runner at present. In spite of the situation, Sterling has remained stable posting gains against … Read more
06/07/2022 GBP/EUR rate restricted as Brexit continues to dominate GBP Sterling continues to be pressured by domestic issues and worries about the government’s controversial Northern Ireland Protocol Bill which could trigger a trade war with the European Union. Expectations that the Bank of England would decide to approach raising interest rates gradually amid the ongoing cost of living crisis further contributed to the GBP/USD … Read more
05/07/2022 Norwegian oil and gas workers begin strike – what’s the impact for Europe? GBP Yesterday saw a slow start to the week for markets as 4th of July celebrations meant US markets were closed. Sterling posted marginal gains against the US dollar but fell against the euro. This being said, it is a very slow week on the data front for the pound with no key releases expected. … Read more
04/07/2022 The UK ten-year government bond yield fell 5% GBP Sterling fell heavily against both the euro and dollar on Friday as UK government bond yields declined, hinting that the market is paring back its expectations for future Bank of England interest rate rises. The UK’s ten-year government bond yields fell 5.0% on July 1st and was back to levels seen on May 31st. … Read more
