Author Archives: Ricky Kielkowski

Pound Strengthens Following Inflation Figures

The pound has pushed higher this morning following the latest inflation figures, which showed a notable increase in price pressures across key sectors.

Inflation in January 2025 rose to 3%, up from 2.5% in December, driven by rising costs in transport, food, and education. This marks a significant jump, reflecting persistent inflationary pressures in the UK economy.

Services Inflation at Highest Level Since August 2024

One of the key contributors to this rise was services inflation, which surged to 5%, its highest level since August 2024. This increase highlights the ongoing cost pressures in the service sector, which could influence future monetary policy decisions.

Bank of England’s Interest Rate Outlook in Question

This morning’s inflation data is likely to disrupt the Bank of England’s interest rate strategy, as policymakers balance the need to control inflation against the risk of stifling economic growth. While inflation remains elevated, expectations for near-term rate cuts are likely to be scaled back as the Bank considers its next move.

Market Focus Shifts to US Housing Data

With no major EU economic releases today, market attention will turn to the US Housing Starts data, which could provide further insights into the strength of the US economy.

For businesses looking to stay ahead of market movements and navigate currency fluctuations, expert insights are essential. If you’d like to explore how these trends could impact your business or identify opportunities in market volatility, get in touch with our specialists today.

Pound Surges on Positive Employment Figures

A great start to the day for anyone exposed to purchasing euros and dollars, as the pound reaches fresh 2025 highs following this morning’s UK employment data release.

A strong set of employment figures has eased pressure on the Bank of England to cut interest rates next month, providing a boost to the pound. UK unemployment figures for December came in at 4.4%, below the market expectation and the Bank of England’s forecast of 4.5%.

Economic Outlook and Interest Rate Expectations

The latest data indicates a strong start to the year for the UK economy, but economists caution that the real test will come when the minimum wage hike and employer tax changes take effect.

With today’s figures reducing pressure on the Bank of England to cut rates next month, markets are now pricing in a higher likelihood that the next rate cut will occur in the second quarter.

Earlier this month, the Bank of England reduced interest rates by 25 basis points, with two voting committee members advocating a larger 50-point cut, assuming that economic conditions were deteriorating faster than expected.

European and US Data Releases

Elsewhere, French CPI figures have been released, meeting expectations at 1.8%.

Later in the morning, Germany’s ZEW business confidence figures are expected, followed by the US NY Fed Empire State Survey in the afternoon. These data releases will provide further insights into business sentiment and economic momentum across key markets.

For businesses looking to navigate currency fluctuations and capitalise on market opportunities, staying informed is crucial. If you’d like to understand how these trends could impact your business or explore strategies to manage market volatility, get in touch with our specialists today.

Market sentiment was positive yesterday, as news of a possible resolution to the Russia-Ukraine conflict boosted risk appetite. Investors responded optimistically, driving gains across major market indices on both sides of the Atlantic.

Adding to the upbeat mood, strong business results updates further bolstered confidence. The ‘risk-on’ sentiment was reflected in market movements, with investors willing to take on more risk in response to these developments.

During yesterday’s European session, most major currency pairs traded within tight ranges. However, the euro faced pressure following weaker-than-expected Eurozone industrial production data for December, weighing on the currency.

Meanwhile, the US dollar saw modest initial gains after rumours emerged that the Trump administration was considering a plan to impose reciprocal tariffs on its trading partners. These speculations contributed to slight volatility in dollar trading.

Looking ahead, today’s key economic release is the second reading of the Eurozone’s Q4 GDP. No revisions are expected to the preliminary 0.0% q/q estimate. In the US, market participants will be watching January’s retail sales data, forecasted at -0.1% m/m, alongside industrial production figures, projected at 0.3% m/m.

For businesses navigating these market movements, staying informed is crucial. If you’d like expert insights on how these trends may impact your business or how to capitalise on market volatility, reach out to our specialists today.

It’s shaping up to be a quiet day in the financial markets, with the primary focus on the release of US Consumer Price Index (CPI) data later this afternoon. Investors and businesses alike will be keeping a close eye on the report, as inflation figures can have a significant impact on market sentiment and future interest rate decisions from the Federal Reserve.

Looking ahead, attention will quickly shift to tomorrow’s UK growth figures. These data releases will provide crucial insights into the economic outlook and could influence the direction of the pound in the coming days.

After a volatile start to the week, sterling has found some stability, bouncing back against major currencies. Notably, GBP/USD (Cable) is closing in on a weekly high, offering a potentially favourable opportunity for those looking to purchase US dollars.

For businesses navigating currency fluctuations, understanding these market movements is key to making informed decisions. If you’d like expert insights on how these trends could impact your business or how to take advantage of market volatility, our team is here to help. Get in touch with one of our specialists today.

With minimal economic data releases this morning, market attention turns to Bank of England (BoE) Governor Andrew Bailey. Investors will closely analyse his remarks for clues on the central bank’s outlook, particularly regarding interest rate cuts and inflation trends. His comments could shape expectations for UK monetary policy in the months ahead.

US Inflation Data in Focus Tomorrow

The next major market-moving event comes from the United States, with the Consumer Price Index (CPI) report set for release tomorrow afternoon.

• Expected Inflation Rate: 2.9%
• Market Impact: A stable or lower reading could reinforce expectations of Federal Reserve rate cuts, while a higher-than-expected figure could boost the dollar and delay monetary easing.

Given the global influence of US economic data, traders will be watching closely for any inflation surprises that could shake markets.

UK GDP Data to Highlight Economic Stagnation

On Thursday, the UK will release Q4 GDP figures, a key indicator of economic performance.

• Forecast: -0.1% contraction
• Trend: The UK economy has failed to grow since July, reinforcing concerns about stagnation and weak domestic demand.
• Impact: A weaker-than-expected GDP figure could further pressure the pound, adding to concerns over the UK’s economic trajectory.

Pound Weakens Across the Board

As the week begins, the British pound is struggling against all major currencies, reflecting broader market sentiment and economic uncertainty. With Bailey’s remarks, upcoming inflation data, and GDP figures all in play, volatility in GBP trading is likely to increase.

Navigating Market Volatility

With key central bank decisions and economic reports ahead, businesses and investors should stay informed and prepared. Whether you’re looking to hedge currency exposure or capitalise on market trends, speak to a QuMoney expert today.