22/03/2023 UK CPI inflation data beating market expectations GBP The pound edged higher on Tuesday morning after the release of CPI inflation data that beat expectations in February and raised the prospects of further Bank of England interest rate rises in the months ahead. Inflation rose year-on-year to 10.4% in February, higher than a previous reading of 10.1% and beating market expectations of … Read more
22/03/2023 Monthly Currency Market View March 2023 Download our Monthly Currency Market View as we take a look at the key trends and consider the many diverse events that shaped the global currency markets in March 2023.
28/02/2023 Sterling gets a boost after Windsor Framework announcement GBP The pound rallied on Monday after an agreement had been reached on the Northern Ireland protocol between the UK and the EU. British Prime Minister Rishi Sunak reported that a breakthrough had been made and EU Commissioner Ursula Von Der Leyen stated that they “have removed any sense of a border in the Irish Sea”. The … Read more
27/02/2023 US personal consumption increases, positive sign for the economy USD The dollar traded close to seven week highs on Friday as the latest data showed US inflation remained persistent, reinforcing expectations US interest rates could remain higher for longer. Fuelling Friday’s rally in the dollar was the release of personal consumption expenditure (PCE) price index which measures the average amount of money consumers are … Read more
24/02/2023 Bank of England expected to hike interest rates by 25 bps in March and April GBP The pound gained on Thursday after comments made by MPC member Catherine Mann. She believes that inflation is still too high and further interest rate hikes are needed to bring it down. She also stated that interest rates at current levels are not high enough. Mann went onto say she sees a ‘troubling change in … Read more
16/02/2023 Slowdown in UK inflation eases pressure on Bank of England GBP The pound fell on Wednesday after the release of UK inflation data. The Consumer Prices Index (CPI) rose by 10.1% in the twelve months to January 2023, down from 10.5% in December 2022. This reading also came in lower than what the market had predicted at 10.3%. The decline of CPI saw Sterling fall and bond yields … Read more
14/02/2023 UK wages grow faster than expected but are still behind inflation GBP Sterling appreciated this morning as wage data in the UK grew more than expected, placing further pressure on the Bank of England to hike interest rates further next month. The data released by the Office for National Statistics, showed earnings grew at their fastest pace outside of the Covid pandemic period at 6.7% in the year … Read more
13/02/2023 UK GDP data disappoints currency markets GBP The pound fell after disappointing GDP data released on Friday. UK GDP declined by 0.5% in December which was more than the 0.3% forecast the market hoped for. The Office for National Statistics stated that the overall economy grew by 0% in the final quarter of the year, meaning the UK has avoided a technical recession. … Read more
06/02/2023 US jobs data stronger than expected USD The dollar strengthened against all major currencies on Friday after the release of strong labour market data. Non-Farm payrolls data came in well above expectations and showed that the US economy created 517,000 new jobs, higher than market consensus, and giving further leeway for the Federal Reserve to continue to hike interest rates. The forecast … Read more
25/01/2023 UK economy slowed faster than expected this month GBP The pound fell across the board after PMI services data showed in January the UK economy slowed faster than expected. UK services PMI read at 48, well below market expectations of 49.7 and slagging behind a previous reading of 49.9. A reading below 50 means that the economy is contracting and economic activity is … Read more
24/01/2023 Markets focus on next week’s central banks’ interest rates decision EUR The euro had a strong start to the week on Monday as European Central Bank President Christine Lagarde reaffirmed the Eurozone’s commitment to tackling record high inflation. Speaking yesterday afternoon, Lagarde admitted that the ECB will keep raising interest rates quickly to slow inflation which remains far too high. Lagarde added that rates will … Read more
17/01/2023 UK wages grew 6.4% in the autumn said ONS GBP Yesterday Bank of England Governor Andrew Bailey said that inflation looks set to fall this year as energy prices decrease. However, he also stated that a shortage of workers in the labour market poses a “major risk” to this scenario: “I think that going forwards the major risk to inflation coming down… is the … Read more
13/01/2023 Inflation data causing USD weakness USD The dollar fell to nine-month lows against the euro after data showed inflation is easing. As inflation is starting to fall this indicates that the Federal Reserve is less likely to increase interest rates as aggressively moving forward. Markets are now pricing in a 25 basis points interest rates rise at the next policy meeting. Inflation year-on-year … Read more
04/01/2023 USD strengthened against all major currencies on Tuesday GBP The pound fell against the US dollar as demand for the greenback picked up and edged higher across the board. The pound fell more than 1%, its biggest drop since mid-December. The downtrend in Sterling is more to do with the dollar strengthening as risk sentiment increased. Furthermore, Sterling could see a bumpy road ahead … Read more
15/12/2022 US Fed raises interest rates by 50 basis points USD The Federal Reserve raised interest rates by 50 basis points and signaled its intention to keep squeezing the US economy next year as the bank enters a new phase in tackling inflation. The federal open market committee voted unanimously to increase the federal funds rate to a target range of 4.25% to 4.5%. It was … Read more
14/12/2022 UK inflation at 10.7%, lower than expectations and previous month GBP The pound eased back from recent highs after headline CPI inflation rose by 10.7% year-on-year in November says the Office for National Statistics, which was less than the 10.9% expected by markets and lower than October’s 11.1%. Inflation increased 0.4% over the month, which was below the 0.6% consensus was looking for and represents … Read more
12/12/2022 Sterling under pressure as the BoE faces a vote of no confidence GBP The pound remained subdued after the release of UK GDP data, which saw the economy grow by 0.5% in October and came in above market expectations of 0.1%. Sterling remains under pressure as the Bank of England faces a vote of no confidence on predicting inflation for the future. MPC members are unsure due to … Read more
09/12/2022 News of another interest rates hike contribute to GBP/USD appreciation GBP Sterling traded close to recent highs on Thursday evening, benefiting from an improvement in risk sentiment. The move higher in Sterling appears to be in relation to heightened expectations amongst investors that the Bank of England will opt for a 50 basis points interest rate hike next month. Whilst US economists continue to forecast … Read more
02/12/2022 China moving away from draconian Covid measures GBP Sterling rallied to its best level for three months against the US dollar and appreciated against the euro with it benefiting form market sentiment shifting to risk-on. As a risk sensitive currency, the British pound has shown to be a benefiter when market sentiment improves. Comments from US Federal Reserve Chair Jerome Powell earlier … Read more
29/11/2022 US Fed to pursue disinflationary measures USD The dollar gained back some of its losses yesterday afternoon but continued to remain under pressure as markets still have eyes firmly on how the US central bank will look to pursue interest rates hikes going into the December meeting. Federal Reserve policymakers stated yesterday that it will be soon time to slow the pace … Read more
