Author Archives: Kris Charalambides

Market Update: Pound Gains as Key Economic Events Approach

Market Update: Pound Gains as Key Economic Events Approach

On Friday, the British pound recorded a significant gain of over 100 points against the US dollar, pushing GBP/USD to its highest level since January 8th. This marked a notable performance for the currency despite concerns about the UK economy.

UK Consumer Confidence & Economic Outlook

Despite the pound’s rise, UK Consumer Confidence declined this month, reflecting growing concerns about the country’s economic outlook. Market sentiment remains cautious as economic uncertainty persists.

Key Events This Week: ECB Rate Decision & US GDP Release

This week’s major market-moving events will occur on Thursday:

  • The European Central Bank (ECB) is expected to announce an interest rate cut of 25 basis points, aligning with forecasts. This decision is likely part of a broader strategy, as the ECB is projected to continue reducing rates throughout 2025.
  • The United States will release its latest Gross Domestic Product (GDP) figures on the same day. These figures will provide crucial insights into the strength and direction of the US economy, with potential global market implications.

Pound’s Outlook: Volatility Ahead?

With no key UK economic data scheduled for release this week, the pound’s recent momentum may be tested. The lack of domestic economic indicators could lead to increased volatility, making the currency more sensitive to external developments.

What This Means for You

As markets react to these events, understanding currency movements is essential. If you’re looking to navigate market shifts or capitalise on currency trends, our experts at Qumoney are here to help. Get in touch today for tailored financial insights and strategies.

Market sentiment improved with softer inflation data and trade signals. UK rate cuts expected—get insights on how this impacts you.

Market Update: Risk Appetite Rises Amid Inflation Data and Policy Signals

Risk appetite improved last week, driven by positive inflation data, signs of a more gradual approach to US trade tariffs, and softening market rate expectations.

Inflation and Interest Rate Expectations

The UK CPI for December came in slightly lower than expected, providing some relief to inflationary concerns. Meanwhile, in the US, core CPI fell short of forecasts, while the headline rate aligned with projections. These figures contributed to shifting market sentiment and expectations around future policy moves.

In the UK, pricing now indicates an 80% chance of a rate decrease in February, with an additional 60 basis points of easing anticipated by the end of the year. Such expectations could influence investment strategies and borrowing costs in the coming months.

Currency Movements and Market Focus

On the currency front, the US dollar lost some of its recent gains last week, reflecting changing interest rate expectations and global risk appetite.

Looking ahead, this shorter trading week in the United States will focus on key political and economic events, including President Trump’s inauguration today. Additionally, the upcoming January flash PMIs for major advanced economies and UK employment market statistics will be closely monitored for further economic insights.

What This Means for You

With shifting market dynamics and economic uncertainty, staying ahead of trends is critical. Whether you’re looking to mitigate risks or capitalise on market movements, our experts at Qumoney are here to help. Get in touch today to explore tailored financial strategies designed for success in an evolving economic landscape.

Market Update: ECB Rate Cut Anticipation Fuels Market Volatility

Market Outlook: Inflation Reports to Set the Tone for Currency Markets

This week, all eyes are on inflation reports from the UK, US, and Eurozone, which are expected to play a critical role in shaping currency markets. As inflation remains a key driver of central bank policies, these figures will provide crucial insights into how policymakers may respond to ongoing economic challenges.


Last Week’s Highlights: USD Strength and EUR/USD Weakness

  • GBP/USD: The pair hit a 14-month low, driven by stronger-than-expected US labour market data.
    • US unemployment rate dropped to 4.1%, outperforming the forecast of 4.2%.
    • Non-farm payrolls surged to 256k, well above the expected 160k, showcasing a robust US job market and an overall strengthening economy.
  • EUR/USD: The euro continues to slide toward parity, trading at its lowest level since November 2022.
    • The euro’s decline has been fuelled by:
      • Rumoured Trump tariffs.
      • Rising concerns over the Eurozone economy.
      • A growing divergence between the Federal Reserve’s hawkish stance and the European Central Bank’s cautious approach to interest rates.

Pound Sterling Under Pressure

  • The pound remains the worst-performing G10 currency this year, reflecting a combination of weak economic data and market sentiment.
  • Markets are pinning hopes on this week’s UK inflation data to provide some relief and bolster GBP performance.

What to Watch This Week

The inflation figures from the UK, US, and Eurozone will be pivotal in determining how currencies move this week. A higher-than-expected inflation reading could prompt further rate hikes or influence policy changes, driving volatility across major currency pairs.


How Could This Impact Your Business?

Inflation-driven market volatility presents risks and opportunities for businesses with international exposure. Understanding these dynamics is critical for managing currency risks and securing favourable exchange rates.

Contact Qumoney’s experts today for tailored advice to help you navigate this volatile market and protect your financial position.

EU PMI figures and German CPI data in focus, US dollar is supported by job gains. Stay ahead of market shifts with tailored strategies.

Market Focus: Key PMI and Inflation Data in the Spotlight

This week kicks off with a focus on PMI figures from the EU, Germany, and France, alongside key inflation and employment updates. Here’s what you need to know about today’s market events and their potential impact.


EU PMI Figures in Focus

Later this morning, the EU, Germany, and France will release their PMI figures, which are expected to come in stronger than last month. If these expectations are met, the data could provide a much-needed boost to the euro, offering temporary support amid ongoing market pressures.


German Inflation Data to Be Released

This afternoon, attention shifts to German CPI figures, with forecasts suggesting that inflation will tick higher for December. The outcome will be closely watched as it could influence the European Central Bank’s (ECB) policy stance ahead of Thursday’s ECB Economic Bulletin, which is expected to reinforce the need for further interest rate cuts.


US Data: Factory Orders and Job Gains

The US Factory Orders report is due late this afternoon and will add to the picture of the US economy’s resilience. Later in the week, markets will turn their attention to Friday’s employment figures, where job gains are expected to remain elevated for December. This ongoing strength supports the narrative of a robust US economy, further bolstering the US dollar.


UK Data: A Quiet Week

It’s a relatively quiet week for UK data, with the Housing Index numbers set to be released tomorrow. With little to drive sterling from the UK side, markets are likely to remain focused on developments in the EU and US.


Currency Outlook

  • The euro edged slightly higher last week, supported by strong Spanish inflation data.
  • The US dollar continues to show strength, reflecting the ongoing economic recovery in the United States.

Businesses trading internationally should remain vigilant as this week’s data could drive currency fluctuations.


How Could This Impact Your Business?

Market volatility tied to PMI figures, inflation data, and employment reports presents opportunities to hedge risks and capitalise on favourable exchange rates.

Contact Qumoney’s experts today for tailored advice to help your business navigate currency markets and protect your financial strategy.

Market Update: Quiet Markets as Focus Shifts to PMI Releases

Market Outlook: Modest Volatility Amid Limited Economic Data

With the New Year holiday limiting economic data releases, market movements are expected to remain flat, and volatility is likely to be modest. However, ongoing developments in the eurozone, UK, and US are keeping investors on alert.


Euro Declines as Interest Rate Concerns Mount

The euro weakened on Friday against major rivals, marking its fourth consecutive weekly decline. This drop follows concerns over a widening US-eurozone interest rate differential, compounded by cautious remarks from ECB President Christine Lagarde.

Lagarde’s comments have increased the probability of a 0.25% ECB rate hike in January, rising from 55% to 65%, signalling a more cautious approach to monetary policy in the eurozone.


Pound Under Pressure Against the Dollar

The GBP/USD currency pair continues to struggle amid:

  • Flat UK GDP growth in Q3.
  • Mixed retail sales data.
  • Rising public sector borrowing.

These factors, coupled with a strong US dollar, have placed the pound under sustained negative pressure. Without significant changes in economic data or market sentiment, this trend is expected to persist.


Key Takeaway for Businesses

With the euro’s decline and the pound facing headwinds, businesses involved in international trade should stay vigilant. Modest volatility may still present opportunities to hedge currency risks or lock in favourable rates.

Speak to Qumoney’s experts today to explore strategies tailored to your needs, ensuring your business is prepared as markets evolve into 2025.

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