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

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