Author Archives: Ricky Kielkowski

Anticipation of the UK Budget and its Impact on Currency.

Money News Overview 29th October: Anticipation of the UK Budget and its Impact on Currency

The week’s calm start on Monday continues into Tuesday, with only small releases planned. The main event today is from the United States, where the Consumer Confidence Index is predicted to improve slightly to 99.3. This improvement could indicate cautious optimism among American consumers, which, if met, could provide modest support to the currency.

Meanwhile, the pound has remained trading near its recent highs against the euro, indicating resilience in the European market setting. However, the pound has steadily declined versus the dollar as investors anticipate the UK budget announcement on Wednesday. Investors will closely monitor indicators of fiscal policy direction, which could affect currency sentiment..

A conservative budget approach may enhance the pound by signalling stability, but significant new spending may cause concerns, potentially impacting on the currency.

Additionally, the U.S. election remains a central focus with potential implications for global markets. Shifts in the election landscape may lead to dollar volatility, especially if significant changes in U.S. economic policy appear likely.

As these developments unfold, traders are examining how the UK budget and the US election will impact market sentiment and currency movements

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Data-wise, the Eurozone flash PMIs for October were roughly consistent with predictions. The industrial sector remained in deep contraction area.

Money News Overview 25th October: Dollar edges slightly lower

Data-wise, the Eurozone flash PMIs for October were roughly consistent with predictions. The industrial sector remained in deep contraction area.

The services remained in growth mode. In the UK, both sectors came in below expectations, indicating a slower rate of growth in the month. In contrast, the US PMIs were marginally higher than expected, albeit the statistics indicate that industrial activity has once again fallen.

In the currency market, the major pairs remained range bound. Against the backdrop of increased risk appetite, the dollar was under some downward pressure. Yesterday, the dollar fell about 0.2% against the euro, sterling, and yen.

Today’s main release will be the German Ifo survey for October. Meanwhile, in the United States, durable goods figures for September are due. However, neither announcement is anticipated to have an impact on foreign exchange markets.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Today's market schedule is significantly influenced by Purchasing Managers Index (PMI) announcements and comments by Bank of England members.

Money News Overview 24th October: Markets await key PMI releases

Today’s market schedule is significantly influenced by Purchasing Managers Index (PMI) announcements and comments by Bank of England members.

PMI data in France, Germany and the Eurozone are expected to show signs of expansion, boosted by the European Central Bank’s (ECB) decision to cut interest rates, which has increased consumer spending.

However, it is anticipated that the UK PMI for the manufacturing and services sectors would both slightly decrease, even if they are both still over the 50 mark.

Ahead of the Bank of England’s monetary policy announcement in November, markets will be closely watching Governor Bailey’s speech. By May of next year, analysts anticipate that the Bank will lower the headline rate to 3.75 percent.

Governor Bailey has recently voiced that the Bank needs to have a more aggressive stance on rate cuts – this factored with a significant fall in CPI inflation has raised the likelihood of a rate cut in November.

GBPEUR has remained stable trading within a 60-pip range over the past week, while GBPUSD has fallen 3 percent over the last month, falling from its multi-year highs. The US dollar is still enjoying strong support with increasing confidence in the strength of the US economy, as markets await the US election.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

UK borrowing rises ahead of Budget

Money News Overview 23rd October: UK borrowing rises ahead of Budget

As we look ahead to next week’s big budget announcement, the pound sterling goes into the budget as one of the best performing major currencies in 2024, thanks to the Bank of England’s cautious approach to interest rate cuts in the face of better-than-expected economic data in the first half of the year.

A well-received budget and a consistent approach to rate drops by the Bank can support Sterling’s outperformance, particularly against the Euro and other European currencies.

Currency-wise, the main pairings remained within extremely narrow trading ranges. The weak price activity was most likely due to insufficient data schedules. The dollar continued to rise even though there were little moves to report.

Turning to the day ahead, the data calendar on both sides of the Atlantic remains relatively sparse. In the Eurozone, the flash reading of consumer confidence is forecast to inch higher to –12.5 in October from –12.9. Elsewhere, US existing home sales data for September are due. However, neither release is likely to make the weather for either the euro or the dollar today.

Meantime, public remarks from a number of central bank officials, including ECB President Lagarde and BoE Governor will be under the spotlight once again. From the Fed, comments by Governor Bowman, the sole dissenter from the September FOMC meeting, will also warrant attention

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Tuesday is relatively quiet on the economic front, with only one major event scheduled.

Money News Overview 22nd October: Focus today will be on Bank of England speakers

Tuesday is relatively quiet on the economic front, with only one major event scheduled. The highlight of the day will be Bank of England Governor Andrew Bailey’s speech at 14:25. His comments are expected to attract significant attention, particularly following the recent unexpected decline in UK inflation.

Investors will be keen to hear Bailey’s thoughts on how this inflation report might impact interest rate decisions for the remainder of the year. Speculation is rife that the report could influence future monetary policy.

Later in the week, the UK’s economic data releases continue with the Purchasing Managers’ Index (PMI) on Thursday. A slight decline in the PMI is expected, with forecasts suggesting a dip to 51.4 from 51.5, indicating marginally slower growth in the UK economy.

In the currency markets, the pound has extended its decline against the US dollar for three consecutive weeks. This sustained weakness may present an opportunity for those looking to sell dollars, as the exchange rate favours dollar holders.

Meanwhile, the pound has been holding its ground against the euro, hovering near yearly highs. This stability reflects the ongoing resilience of the pound in the face of mixed economic signals.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.