Category Archives: FX News

Yesterday’s data calendar focused on the Eurozone. The Eurozone’s Q2 GDP result came in at +0.3% maintaining the pace of growth in Q1 and slightly ahead of consensus (+0.2%).

France led growth at +0.3% q/q (f’cast for 0.2%), followed by Spain at +0.8% q/q (f’cast for 0.5%). Meanwhile, the German economy contracted by 0.1% quarter on quarter while Italy increased by 0.2% (as expected).

Overall, the GDP statistics had no significant influence on the euro. On the currency front, the other major pairings are starting this morning at levels close to those set yesterday.

 Today’s key data is a flash reading of Eurozone HICP inflation for July. However, today’s market attention is on the US Federal Reserve meeting. There is a strong consensus that rates will remain unchanged this month.

The market, however, is fully pricing in a 25 basis point rate decrease in September. As a result, investors will be looking for unambiguous guidance from the meeting statement and Chair Powell’s press conference about whether the Fed will lower rates in September.

As a result, today’s Federal Reserve meeting could cause the dollar to fluctuate.

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.

A quiet start to the week ahead of Thursdays Bank of England interest rate announcement.

Today we have the consumer lending figures for the UK and CBI distributive trades survey.

Over the weekend the pound declined against both the euro and the USD ahead of this week’s Bank of England policy announcement.

Markets are currently pricing in a 50 percent chance of a rate cut on Thursday.

There is likely to be further GBP weakness over the coming days ahead of the Bank of England’s all-important announcement.

For the US, the jobs report on Friday will also be closely watched and can play a key role on the Feds next policy decision. Should the date come in weaker than expected, the market will likely price in more policy easing from the Federal Reserve for the coming months, which will weigh on the dollar.

The Fed policy announcement is due on Wednesday, where it is expected that there will be no change in interest rates.

Markets will be keen to see what comments come from the announcement, where it is expected there will be cautious guidance that is consistent with expectations for a first-rate interest rate cut in September.

Finally for the week, we have the GDP figures for France and Germany on Tuesday, retail sales for Germany on Wednesday and house price data for the UK on Thursday. 

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.

The pound suffered its largest one-day slump since April as markets raised bets that the Bank of England would reduce interest rates next week.

However, money market pricing suggests an important rise in expectations that the Bank of England will cut interest rates at its August 1 policy meeting.

The odds of such a move edged above 50%, in tandem with rising expectations for interest rate cuts in the U.S., confirming the linkage between U.S. and UK rate expectations.

The odds of such a move increased above 50%, aligning with rising expectations for interest rate decreases in the United States, showing the connection between US and UK rate expectations.

Meanwhile, core-PCE inflation increased by 2.9% annually in the second quarter (vs. +2.7% forecast). In contrast, the German Ifo and French business sentiment indicators for July declined and came in below estimates.

Looking ahead, the key release of importance will be the June report of US core-PCE inflation. The consensus is for a small fall of 2.5%, while the Q2 data released yesterday implies it could be higher. meanwhile, US personal consumption and income projections for June are due.

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.

In today’s economic calendar, German IFO which measures businesses confidence in Germany is set to rise for business sentiment and current conditions.

Later on today, we have a mixture of US data releases. The number of people who have filed for unemployment benefits is set to come in at 238k.

US Gross Domestic Product is priced in to rise by 2 percent in the second quarter of 2024 (April – June). Economic growth in the States has been supported by an increase in consumer spending and inventory building, however markets are still pricing in a September interest rate cut.

Pound Sterling has fallen this morning against a number of currencies in the G10 (JPY, CHF, USD & EUR) after a stock market selloff. A decline in investor sentiment has pushed GBPUSD to a two-week low.

GBPEUR has lost most of its gains sustained over the past week; but still remains marginally close to the two-year high it achieved earlier this month.

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.

GBPJPY is down a significant 5 percent as pressure mounts of the Bank of Japan to reduce interest rates. GBPAUD is up 2% over the course of the last week.