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
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
