Monthly Archives: March 2024

According to official numbers released earlier this morning, the UK economy grew again in January.

The measure of everything generated in the UK, known as gross domestic product (GDP), increased by 0.2%, according to the Office for National Statistics.

It is the first official economic growth announcement since a recession was declared last month, following two consecutive three-month spells of negative economic growth.

Over in the U.S In the immediate aftermath of the CPI release, the dollar remained firmer. However, the dollar gave up some of its gains before the close last night. 

However, in early trading, sterling has not been impacted by the report. Later today, Eurozone industrial production figures for January will be announced. Barring any huge surprises, the data are unlikely to have an influence on currency markets.

The UK Employment figures kick off the economic calendar today. Wages are up by 6.1% in the three months to the end of January.

With wages being higher than the rate of inflation it will prove difficult to cut interest rates any time soon.

Alongside this the ILO Unemployment rate has come in at 3.9% which is higher than expected. Employment reports are closely watched by the Bank of England, as they provide key data on where the economy is fairing.

Elsewhere this morning Germany has posted its Consumer Price Index. As expected, inflation has stayed at 2.7%.

As Europe’s largest economy, this is closely watched by investors as an indicator of the current state of the economy in the Eurozone.

Later today sees attention turn to the US, with the release of the Consumer Price Index. All eyes will be focused on this, as inflation in the US is expected to fall to 3.7% (from 3.9%).

Looking ahead this week there is key data for the UK, with GDP being released tomorrow morning. Markets are expecting to see no growth month on month.

On the currency front, the pound continued to drop off yesterday after last weeks rally. The pound is currently on the back foot against both the euro and the dollar after this morning’s releases.

The start to the week is very quiet in terms of economic data with nothing to really report on today.

Focus will shift to tomorrows raft of data and more importantly the UK Employment figures.

The latest figures are likely to suggest that the jobs market still remains tight, with the unemployment rate falling to 3.8 percent in the 3 months to December period compared to 4.1 percent in the previous 3-month period to September.

For the US tomorrow, we have the Inflation figures later in the afternoon. The report will provide key data to the Federal Reserve’s decision-making process.

On Wednesday, we have the UK Growth figures & Industrial Production number due.

Lastly, markets will be particularly interested in the US Employment, PPI and Retail Sales figures on Thursday.

In terms of currency movements, the pound has begun the week down from its highs on Friday against the euro and dollar.

Hopes that the ECB and Fed will cut interest rates before the Bank of England has helped push the pound to multi-month highs against its counterparties

As expected, the ECB left monetary policy unchanged yesterday. Furthermore, the central bank maintained that interest rates are at a level that should significantly contribute to returning inflation to 2%.

Meanwhile, at the press conference, President Lagarde stated that the ECB will have much more data in June’s meeting, implying that an April rate decrease is unlikely.

In the immediate wake of the meeting’s announcement, market rate expectations fell slightly. However, as the day went on, the euro recovered its losses, while the dollar experienced some downward pressure.

Today’s focus will be on February’s US labour market data. Payrolls are expected to rise by 200k, down from a 353k increase in January. The unemployment rate is predicted to continue at 3.7%, while average earnings growth will decrease. The date represents some event risk for the dollar today.

In today’s economic calendar a mixture of data has already been released. The number of purchase orders placed with German manufacturers has significantly dropped by – 11.3 percent in February. 

The change in the price of UK homes rose by 0.4 percent in February, this is the fifth consecutive month house prices have increased.

This afternoon, the European Central Bank are set to hold interest rates at 4.5 percent. Inflation in the EU remains above the 2 percent target rate at 2.5 percent.

Yesterday the Chancellor of Exchequer Jeremy Hunt outlined his fiscal plan for the following financial year. The main talking point was Hunt announced a 2p reduction to the National insurance, meaning the average employee will retain an additional £450 per year.

The Pound reacted positively against the Dollar yesterday afternoon after the Fed Chair Powell’s testimony showed no signs of support for the Dollar.

 GBPUSD has marked its fifth straight day of continuous gains, helping the Pound achieve a one month high against the Dollar.

 On the other hand, GBPEUR has been trading in a tight 50-point range since the start of March. Investors will pay close attention to ECB President Lagarde’s comments later on today to understand her views on future growth and when rate cuts will commence.