Category Archives: FX News

The British Pound has rallied to its most significant level against the Euro in more than two years, after registering a substantial 0.65% the day before, bringing it to its highest since March 2022.

Euro exchange rates fell after PMI data revealed that the Eurozone economy contracted in September, with substantial slowdowns in activity in France and Germany.

Meanwhile, in the United States, the gap between the services and manufacturing sectors widened, with the former rising to 55.4 and the latter falling to 47.0.

Looking ahead, the German Ifo for September will be the most notable release of the day. The index is expected to decline modestly from its current low level. In the United States, the Conference Board measure of consumer confidence is expected to improve somewhat. However, the figures are unlikely to alter the market.

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.

We start the week with fresh PMI data being released for the EU and the UK.

Already released this morning, French PMI figures have revealed that the manufacturing & services sector has fallen slightly short of expectations.

The euro has already begun the week on the back foot following the latest data this morning, with the German PMI to follow very shortly, before EU and UK data at 9am.

The pound had a strong ending last week against all its major peers, notably the euro, making for the biggest weekly advance since November 2023. This was helped by a ‘hawkish, Bank of England policy decision, choosing to leave the headline rate as it is for another month.

Sterling benefited as a result of the decision to hold interest rates. The 8-1 vote to maintain the rate at 5 percent signaled that the MPC was in agreement on the need to keep interest rates unchanged. Had more members voted for a cut, the pound may have come under pressure.

Tomorrow, we have the German IFO business climate due, followed by the US Home price index and conference board survey.

Last week, the FED cut its rates by 50 basis points, with a further rate cut expected in the coming months.

Later in the week, a number of FED policy makers will be talking and should give further clues on the expected rate cuts.

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.

Yesterday, the Bank of England maintained the bank rate at 5%, as predicted. The MPC voted 8-1 to keep interest rates unchanged, with one member supporting a 25 basis point drop.

The Monetary Policy Committee is reviewing a mixed bag of data, with headline inflation generally close to its 2% objective, but price increases in services, which are responsible for around 80% of the UK economy, edged up to 5.6% in August. Wage growth in the United Kingdom fell to a more than two-year low in the three months to July, but remained quite strong at 5.1%

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Elsewhere, markets were upbeat as analysts digested the Fed’s decision to slash interest rates by a whopping 50 basis points. Meanwhile, the BoJ chose to leave policy on hold overnight, as expected. The market’s reaction to the decision was modest.

Yesterday, the dollar experienced some downward pressure. At the same time, sterling had a firmer tone.

Already this morning, UK retail sales rose by 1% in August (compared to +0.4% forecast). Sterling has taken the lead in early trade following the release. Later today, the big feature will be the flash reading of Eurozone consumer confidence in September.

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.

Yesterday’s macro diary was data-driven and focused on the United States. Headline retail sales for August exceeded estimates, and several of the key underlying statistics were also positive.

US industrial production for August again exceeded expectations, despite downward revisions to previous months. Meanwhile, homebuilder sentiment in September followed yesterday’s trend of consensus outperforming US statistics.

The dollar was not much impacted by the strong US macro newsflow. The majority of the FX majors remained inside very narrow ranges, however, sterling has taken on a slightly softer tone in the last 24 hours.

This morning, the UK CPI inflation numbers for August were revealed. The headline CPI maintained at 2.2%, while the core CPI came in slightly higher than expected at 3.6% (vs. 3.5% forecast).

Looking ahead, the previously mentioned Fed rate decision (after the European close) is a major focus for markets and carries significant event risk for the dollar. The Fed has indicated that it will lower interest rates today.

However, there is some uncertainty over the size. In recent days, there has been talk that the Fed may opt for a 50bps cut rather than a 25bps one. Aside from the rate announcement, Fed Chair Powell’s press conference will be eagerly watched.

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.