Monthly Archives: June 2024

The pound benefited from positive data at the back end of last week and has since edged higher against both the euro and the US Dollar.
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Money News Overview Wednesday 5th June: British Pound remains one of 2024’s best-performing currencies

Overnight, Prime Minister Rish Sunak reminded the country that he is still in the race by overcoming his rival Keir Starmer in the first election debate.

A post-debate YouGov poll found Sunak to be the better performer by 51-49%, as he went on the attack and strengthened the Conservatives message to the people. Starmer did not appear to appreciate the format and was somewhat flustered by Sunak’s strategy of pressuring Labour for details on its solutions to the country’s number of issues.

Looking ahead to the next day, the US non-manufacturing ISM for May will be the primary data focus. It is predicted that the index will return to expanding territory, increasing to 50.8 from 49.4. Producer price inflation for April is expected throughout the Eurozone. 

For the remainder of the week the European Central Bank’s decision on Thursday is all but certain to be the first major central bank to cut interest rates as it shrugs off a rise in inflation and takes a different path in monetary policy from the UK and US.

Markets and ECB officials are highly confident that the central bank will lower its benchmark deposit rate by 25 basis points from a record high of four percent tomorrow. Combined with Friday’s US job report, these are the main highlights, However, keep an eye on polls, as volatility may increase if the outcome is less certain.

Dollar Gains on Tariff Talks as Markets Await US Inflation Data
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Money News Overview Tuesday 4th June: All eyes will be on this weeks ECB policy announcement

It is a quiet day for the markets with only a handful of data due.

Early this morning, we have the German employment figures, followed later by the US factory orders & JOLTS – job opening numbers.

Markets will be looking ahead to this week’s ECB monetary policy announcement on Thursday and the US labour market report on Friday.

There is a high expectation that the ECB will cut rates on Thursday. Because of this, the decision itself is unlikely to be a shock to markets, what will move the market is the guidance thereafter on future rate cuts.

As always, the highlight is the meeting that follows the rate announcement. There is still a strong chance the euro will weaken towards the end of the week following the announcement.

Sterling has begun the week in buoyant fashion, touching 3-month highs against the US Dollar and holding on to its end-week gains against the euro.

This comes on the back of a 21-month high against the euro after Mays inflation figures showed that April inflation was stronger than had been expected. This helped sure markets that an interest rate reduction was unlikely to happen in June, which boosted the pound.

The euro to dollar exchange rate hit a new three-month high overnight, following recent data out from the US that has been softer than expected.

All eyes in the US will be on Friday’s data.

US-China Tariff Deal Lifts Dollar as Markets Await Key UK Data
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Money News Overview Monday 3rd June: ECB interest rates and US Non-Farm Payrolls expected to dominate markets this week

Purchase Manager Index are the major releases this morning.

The UK is set to release its Manufacturing Index, where It is expected to post a positive number. Last month, markets saw the sector fall below the 50-expansion level. However, forecasts are expected to come back in above the 50 level at 51.3.

As the week goes on, German Employment data is the key release tomorrow. Markets are poised to tune in to this release as employment is a key indicator to the current state of the economy.

Wednesday is the busiest day of the week in terms of economic releases, with the European Central Bank releasing their Interest Rate Announcement. Markets have pencilled in a cut of 0.25%.

In the build up to this event, the currency market may experience some volatility.

As for key US releases this week, Non-Farm Payrolls are released on Friday. Markets are forecasting a rise to 190k (from 175k)

The pound has continued to stay at yearly highs for the GBP/EUR rate. As we get closer to the release of the ECBs interest rate announcement on Wednesday, market fluctuations will be heightened. Any cut in rate and markets will likely see the pound increase its strength against the euro.

As for GBP/USD we are still sitting at the highest level since March.

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