Category Archives: FX News

Pound recovery after dollar drop
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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.

Modest Growth & Retail Challenges
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Market Update: UK Economy Struggles for Momentum Amid Modest Growth

After the inflation-driven market swings earlier this week, yesterday’s financial landscape was notably calmer, despite a relatively packed macroeconomic calendar.

The latest UK GDP figures for November, released just before market open, revealed a modest growth of 0.1%, falling slightly short of the 0.2% forecast. This underwhelming figure reinforces the narrative that the UK economy is still struggling to gain meaningful momentum.

Retail Performance Reflects Economic Challenges

A closer look at the report highlights a weak month for supermarkets, with declining sales volumes dragging down overall retail performance. This downturn was only partially offset by increased sales in the clothing and footwear sectors. The dip in consumer spending may signal broader concerns about economic confidence, particularly with key policy changes on the horizon.

Looking ahead, the upcoming National Insurance cuts in April and the planned increase in the minimum wage could have a significant impact on both consumer behaviour and business costs. While some households may see a slight boost in take-home pay, businesses—especially those in retail and hospitality—could face higher wage bills, potentially leading to cautious hiring and investment strategies.

Key Market Watch: US Industrial Production Data

Today’s primary data highlight comes from across the Atlantic, with the US industrial production report for December set for release this afternoon. Investors and market watchers will be keen to see whether manufacturing output has rebounded or if economic uncertainty continues to weigh on industrial activity. Given the global interconnectedness of supply chains, shifts in US production could have ripple effects for UK businesses and financial markets.

What This Means for You

Navigating economic fluctuations requires careful planning and expert insights. If you’re looking to understand how these market trends could impact your business—or how to capitalise on potential opportunities—our experts at Qumoney are here to help. Get in touch today for tailored financial strategies to stay ahead in a shifting economic landscape.

UK Inflation Falls to 2.6% as Markets Anticipate BoE Rate Cut
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Market Update: UK Growth Slows as Stagflation Concerns Rise

The latest economic data highlights challenges for the UK economy, with weaker-than-expected growth figures and signs of underlying economic weakness. Meanwhile, attention shifts to the US data releases later today.

UK Economy Grows by Just 0.1% in November

The Office for National Statistics (ONS) reported this morning that the UK economy grew by a modest 0.1% month-on-month in November, missing the forecasted 0.2%.

Additionally, industrial and manufacturing output showed a month-on-month decline, indicating underlying economic fragility and further challenges to growth. These figures have raised concerns about the UK’s economic outlook.

Stagflation Fears Weigh on the Pound

The weaker economic data has led to concerns about stagflation, a period of low growth and high inflation. These conditions are increasing speculation that the Bank of England may opt to reduce interest rates at their next monetary policy meeting to stimulate growth.

Following the release of this data, the pound weakened against both the euro and the dollar, reflecting investor unease over the UK’s economic prospects.

US Data in Focus

This afternoon, the market will turn its attention to US economic data, including:

  • Unemployment claims: Expected to rise to 210k, providing a snapshot of the US labour market.
  • Retail sales for December: Forecasted to increase by 0.6%, offering insights into US consumer spending trends.

These releases could influence the dollar’s performance and provide further clarity on the strength of the US economy.

How Could This Impact Your Business?

The combination of weaker UK data, pound depreciation, and upcoming US releases highlights the importance of staying prepared for market volatility. Businesses with exposure to GBP/USD or GBP/EUR should consider strategies to hedge currency risks and take advantage of favourable movements.

Contact Qumoney’s experts today for personalised advice on navigating these market conditions and protecting your business.

ECB interest rate cut impact on markets
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Market Update: PPI Data and UK Economic Focus Dominate the Week

The week continues with a relatively quiet start, but key economic data and political developments are set to influence markets in the coming days. Here’s what to watch.

US Producer Price Index (PPI) in Focus

This afternoon, the US Producer Price Index (PPI) is due for release, with forecasts predicting a year-on-year rise to 3.4%, up from 3%. A stronger-than-expected reading could bolster the US dollar further, as it would reflect increasing inflationary pressures, potentially shaping future Federal Reserve policy.

Key Political Week for the UK

In the UK, this is a pivotal week for Chancellor of the Exchequer Rachel Reeves, as she prepares to face scrutiny during Prime Minister’s Questions in Parliament tomorrow. The debate will likely focus on government debt and plans to address it, with options including:

  • Tax increases.
  • Reduced government spending.

Labour leader Keir Starmer has hinted at a determined approach to cutting public expenditure, adding political weight to the week’s economic discussions.

UK Economic Data: CPI, GDP, and Retail Sales

On the data front, the UK Consumer Price Index (CPI) is scheduled for release tomorrow morning, with forecasts suggesting inflation will hold steady at 2.6%. Later this week, additional key metrics, including Gross Domestic Product (GDP) figures and Retail Sales, will provide further insights into the UK economy’s health.

Currency Markets: Pound’s Mixed Performance

The pound remains under pressure, continuing its downward trend against major currencies. However, there are early signs of recovery today, with the pound gaining:

  • 40 points against the dollar.
  • 10 points against the euro.

This mixed performance reflects ongoing volatility in the foreign exchange markets, as traders assess political and economic developments.

How Could This Impact Your Business?

With significant data releases and political events on the horizon, currency markets are poised for potential volatility. Businesses should take proactive measures to hedge against risks and optimise their international transactions.

Contact Qumoney’s experts today for bespoke strategies to navigate these uncertain times and capitalise on market opportunities.

Market Update: UK Inflation Eases, Boosting the Pound
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Market Update: UK Inflation Eases, Boosting the Pound

The latest UK inflation figures have surprised markets, coming in lower than expected and offering relief amid ongoing economic pressures. Here’s what you need to know.

UK Inflation Falls to 3.4%

This morning’s data revealed that UK inflation fell to 3.4%, below the forecasted 3.8%, surprising economists with a 0.4% drop. This unexpected easing of inflation:

  • Alleviates some of the pressure on Chancellor Rachel Reeves, as she navigates a challenging economic landscape and a bond market sell-off.
  • Has already triggered a jump in the pound, with gains against both the euro and the dollar following the release.

Upcoming Key Data Releases

Today’s focus now shifts to:

  • German Growth Figures: Expected later this morning, providing insights into the health of Europe’s largest economy.
  • EU Industrial Production: Also due this morning, potentially influencing euro performance.
  • US CPI Data: This afternoon, the US inflation figures will be closely monitored, particularly after a series of strong economic results in recent weeks.

How Could This Impact Your Business?

The pound’s upward movement presents an opportunity for businesses dealing in GBP/EUR or GBP/USD transactions to secure favourable rates. Meanwhile, forthcoming data from the US and EU could create additional market volatility. Staying informed is key to managing currency risks and maximising opportunities.

Contact Qumoney’s experts today for tailored strategies to protect your business and capitalise on market shifts.

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