Category Archives: FX News

Today there is a mixture of key economic releases in the US. Markets will be keen to see what the Unemployment claims numbers comes back in at, as it is expected to come in higher at 215k above forecasts of 212k.

The change in the value of all goods and services produced in the USA is forecasted to grow 2.4 percent in the first quarter of 2024. A higher-than-expected GDP release will show signs of support for the Dollar and the Feds hawkish stance on holding interest rates.

 Although US GDP is expected to ease in the first quarter of this year following two stronger expansions at 4.9% (Q3 2023) and 3.3 (Q4 2023), consumer spending is still gradually increasing in the States.

Markets now expect only one or two rate cuts this year from the Fed. The delay of monetary policy will be closely watched by investors to see how it impacts the US economy.

 The Pound descended last week following dovish comments from Ramsden outlining a June rate cut is on the cards. However, this week Pound Sterling has recouped some of its losses against the Euro and Dollar.

French and German PMI figures came in this morning revealing mixed data, that has seen the euro weaken off against the pound.

Following the eurozone PMI data, the UK’s own flash estimates have shown a decline from last month’s expansion of 50.4 in the services sector.

However, manufacturing PMI data for the UK has revealed that the sector has grown by 1.9 percent supporting the pound up to 54.9.

Later in the day for the US, we have the PMI Manufacturing figures along with the New Home Sales numbers.

The current uncertainty about how quickly the Fed will cut rates means that the US PMI data Is likely to garner more attention. Markets will also shift their attention to this week’s Q1 GDP for the US.

Later this afternoon, two Bank of England policy makers are scheduled to speak, therefore markets will be looking for any clues on interest rate cuts.

Overall, markets remain volatile with the pound dropping off yesterday, following rising expectations that the Bank of England could potentially cut rates ahead of the Federal Reserve.

Markets look to this afternoon for the first major economic release of the week. The European Consumer Confidence Index is set to be announced at 15:00.

With the lack of economic releases today, attention will turn to Tuesday’s data. There is a handful of Purchase Manager Index releases across Europe and the UK tomorrow morning.

For the US the key releases of the week are expected with New Home Sales, markets are forecasting a rise of 8k month on month. Followed by the release of employment and gross domestic product, the latter is expected to show a decline to 2.1% (from 3.3%).

On the currency front, the pound has taken a massive hit following Friday evening’s speech from Bank of England Governor Bailey.

The pound/euro rate has fallen 100 points off the back of the speech, as for the pound/dollar rate this is sitting at its lowest rate since November 2023.

This morning we have the G20 meeting, Investors will keep a close eye on the comments from central bankers to see if they create any market volatility.

In the US unemployment claims is expected to come in at 215k. Existing home sales is forecast to fall in March to 4.2 million as mortgage rates remain high and house prices surge in the States.

Yesterday, UK CPI inflation rose to 3.2 percent in March, beating market expectations (3.1 percent). GBPEUR initially rose to a two month high following the inflation reading, however has since lost its gains.

The pound has struggled against the Dollar over the course of the last week. US CPI data has reinforced the Federal Reserve’s decision to maintain current interest rates as long as necessary to bring inflation down to their target rate of 2 percent.

Markets will shift their attention to tomorrow, UK retail sales are expected to rise in March, with this year’s early Easter helping to boost the data.