Category Archives: FX News

Sterling has fallen about 0.9% since its post-CPI peak against the dollar on Wednesday. Sales numbers have left the pound on the back foot this morning, with a 1.2% decrease in June, significantly worse than the 0.6% forecast, and this is mostly due to cooler weather. This reduces sales on a net basis in Q2 and should be somewhat of drag on economic growth.

People are becoming more hopeful about the possibility of near-term rate reduction from the Bank of England. With no further data for markets to digest today, speculators will turn their attention to the next round of PMI releases early next week.

The ECB did provide some assistance for the euro. With core inflation rising and some officials expressing regret over the first rate cut last month, the rate pause at 3.75% shocked no one.

Markets are still expecting a second rate decrease in September, which Lagarde described as a wide-open meeting. Aside from some current account data this morning, the focus will shift to next week’s PMIs and today’s dollar dynamics.

This afternoon, we have a handful of Fed speakers to wrap up the week before the emphasis shifts to GDP and core PCE inflation next week.

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.

Already released this morning, UK earnings growth eased to 5.7 percent (previous 6%). Unemployment remained at 4.4 percent suggesting the labour market is healthy.

This afternoon, we have the European Central Bank interest rate announcement. The ECB dropped rates last month from a record high of 4.5 percent; inflation and wage growth remains high in the Eurozone, so markets are pricing in a September rate cut.

The ECB policy decision will be followed by Christine Lagarde’s news conference. Investors will keep a close eye on her comments to grasp her outlook on future rate cuts and how the EU economy is fairing.

In the States, Fed policymakers hinted that inflation is moving in the right direction, however, they want the US Federal Reserve to be patient as there is possibility inflation might rise again.

Pound Sterling protected its recent gains after UK CPI inflation released above the market consensus, apply pressure on the Bank of England to hold interest rates in August.

GBPEUR is trading 2 percent over its yearly average moving rate. GBPUSD has lost some of it gains but is still at its highest level this year.

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 relatively calm start to the week in the financial markets on Monday continued into yesterday’s price movement. On the data front, the most notable release was US retail sales in June.

The big FX pairings traded in relatively tight ranges all day yesterday. One of the few visible developments was the dollar’s early marginal downward pressure.

However, the dollar rose following the announcement of retail sales data, before falling again overnight.

The pound sterling kept its recent gains as UK inflation met its target in June, leaving many unsure if the Bank of England would cut interest rates in August.

The market’s indicated expectations for a Bank of England rate drop on August 1 were split 50/50 going into today’s all-important inflation statement, and we’re no wiser as a result. This is because all three major components of the headline CPI, core CPI, and services CPI met expectations.

Later today, the final Eurozone HICP figure for June is expected to confirm inflation at 2.8% for the month. In the United States, industrial production numbers 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.

Today is a quiet start to the week, with only the EU Industrial Production and NY Fed Empire State survey due.

Last week the pound touched a 2-year high against the euro and hit a 9-month high against the dollar.

The pound has gained strength following the election results and from a lot of uncertainty in Europe and the US.

Later in the week, we have retail sales, inflation and employment figures which could determine whether the pound continues its upwards trajectory.

Wednesday’s inflation figures will be followed by Thursday’s wage numbers, which will play a key role in whether the Bank of England cuts interest rates at its next policy meeting at the beginning of August.

Elsewhere this week we have the German ZEW confidence & US retail sales due.

This Thursday the ECB policy announcement will be closely watched to see if they take any action regarding interest rates. The comments afterwards will as always garner a lot of attention.