Category Archives: FX News

Market Update: ECB Rate Cut Anticipation Fuels Market Volatility
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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.

Market Update: Narrow Trading Ranges and Focus on US Labour Data
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Market Update: Narrow Trading Ranges and Focus on US Labour Data

Currency markets traded within narrow ranges yesterday, as limited US trading activity and a quiet overseas data schedule subdued price movements. Here’s the latest on what’s driving the markets and what to expect.

Sterling on the Defensive as Dollar Edges Higher

Among yesterday’s modest movements:

  • Sterling remained under pressure, reflecting ongoing concerns about the UK’s economic outlook.
  • The US dollar rose slightly, supported by its status as a safe haven amid a lack of major market catalysts.

US Labour Market Data in Focus

Today, the market spotlight turns to the December US labour market data, which could introduce event risk for the dollar. Recent months have shown signs of a slowing labour market, though the data has been volatile.

Key expectations include:

  • Payroll growth: Forecasted at +160k.
  • Unemployment rate: Expected to hold steady at 4.2%.
  • Average earnings growth: Anticipated at +4.0% year on year.

Stronger-than-expected results could further support the dollar, while softer data may raise questions about the Federal Reserve’s monetary policy trajectory in 2025.

How Could This Impact Your Business?

Narrow trading ranges may provide a brief reprieve, but today’s labour market data has the potential to reignite volatility. Businesses trading in GBP/USD or EUR/USD should prepare for potential price swings as markets digest the US employment figures.

Contact Qumoney’s experts today to discuss strategies for managing currency exposure and seizing market opportunities.

Markets Jittery as US Imposes 104% Tariffs on Chinese Imports
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Market Update: GBP Weakens as Focus Shifts to US and European Developments

With no UK economic data scheduled for the remainder of the week, market attention has turned to key events unfolding in Europe and the United States. Here’s the latest on the factors driving currency movements.

German Industrial Output Rises

In Germany, industrial output for November posted a solid 1.5% increase, rebounding sharply from the -1% decline in October. This improvement highlights signs of recovery in the Eurozone’s largest economy, providing some support to the euro.

US Non-Farm Payrolls in Focus

Markets are looking ahead to tomorrow’s non-farm payrolls report, which is expected to show an increase of 160k jobs. A stronger-than-expected result could solidify GBP/USD trading at a one-year low, reflecting the sustained strength of the US dollar.

Speeches from several Federal Reserve policymakers today may also provide further support to the dollar, which has gained momentum thanks to:

  • Optimism following Trump’s election.
  • The Fed’s projections for rate cuts this year.

GBP/USD Falls Amid UK Economic Challenges

The GBP/USD currency pair has dropped more than 9% since late September, driven by:

  • Soaring UK borrowing costs.
  • Increasing pressure on Chancellor Rachel Reeves, who faces difficult decisions around borrowing, spending cuts, and tax increases—measures likely to weigh on the UK’s economic growth.

The pound has become the worst-performing currency in the G10 this week, with a fierce selloff highlighting investor concerns as we head into the new year.

How Could This Impact Your Business?

The pound’s weakness and the dollar’s continued strength present challenges for businesses involved in international transactions. However, this market volatility also offers opportunities to hedge currency risks and secure competitive rates.

Contact Qumoney’s experts today for bespoke strategies to protect your business and capitalise on these market dynamics.

Markets Fragile Ahead of Easter as Pound Hits Low Against Euro
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Market Update: German Retail Sales, EU Confidence, and US Data in Focus

Today promises to be a busy day for markets, with key data releases from Germany, the EU, and the US set to drive sentiment and currency movements. Here’s what you need to know.

German Retail Sales Beat Expectations

This morning, German retail sales figures were released, showing a 0.6% monthly rise, surpassing expectations of a 1.9% decline. On a yearly basis, retail sales grew by 2.5%, further highlighting the resilience of Germany’s retail sector amid broader economic challenges.

EU Confidence and PPI Data Ahead

Later this morning, the focus will shift to the EU Business & Consumer Confidence Index, which will provide insight into economic sentiment across the Eurozone. This will be followed by the release of the Producer Price Index (PPI) numbers, offering further clues about inflation trends in the region.

Key US Data: ADP Employment and Petroleum Reports

This afternoon, attention turns to the US with two major releases:

  • The ADP National Employment Report, which estimates the monthly change in US employment excluding farming and government sectors.
  • The Weekly Petroleum Report, a key indicator for energy markets and inflation expectations.

US Dollar Strengthens Further

Over the past 24 hours, the US dollar has strengthened, supported by:

  • Above-consensus US economic data, confirming rising inflationary pressures.
  • Lowering odds of a Federal Reserve interest rate cut, with markets now expecting no cuts until at least July.

In the past 30 days, the dollar has gained:

  • 2.75% against the pound.
  • Nearly 3% against the euro.

This robust performance underscores the resilience of the US economy and its continued influence on global markets.

How Could This Impact Your Business?

The stronger dollar and mixed economic data across Europe present both risks and opportunities. Businesses should monitor these developments to optimise their international transactions and hedge against volatility.

Speak to Qumoney’s experts today for tailored strategies to safeguard your business and capitalise on market movements.

Pound Lags as Tariff Fears Return Despite UK GDP Surprise
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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.

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