Category Archives: FX News

Looking ahead to today’s economic releases, Germany’s latest ZEW Business Confidence report is set to be released. Investors will be keen to see how businesses are currently viewing the economic sentiment, markets are forecasting a positive but small rise to 20.1 (from 19.9).

As the week goes on attention will switch to both the UK and US for the major releases of the week.

Consumer Price Index is set to be released early Wednesday morning for the UK. Set to come in at 3.6%, this will be key in setting the tone for Thursdays Interest Rate Announcement.

The US will publish their FED Policy Decision Rate, forecasts are set for no change for the US. With rates at 5.5%, this will be watched with keen eyes as we look to see if there’s any talk of rate cuts for the US.

The UKs latest Interest Rate Announcement will be at noon on Thursday. It is widely expected that there will be no change in the current rate, which sits at 5.25%.

This is a busy week for the UK, with further economic releases coming throughout the week. Retail Sales and PMIs all releasing this week. It is likely that with all the releases this week for the UK, markets may see some increased volatility for the pound.

On the currency front, the pound has continued to hold around last weeks highs against the euro. Whereas the pound has been in a steady decline against the dollar.

A nice busy week in terms of economic data, although today is quiet.

We have the CPI figures due for the EU, followed by the US Housing Index later in the day.

Focus then shifts to Wednesdays UK Inflation figures ahead of the much-anticipated Bank of England policy announcement.

Inflation figures are expected to fall from 4 percent to 3.6 percent.

Last week’s US Inflation figures surprised markets edging upwards rather than the expected decline markets had been holding out for. On the back of this, markets have pushed back expectations of an interest rate cut.

On Wednesday evening we have the US Fed policy announcement. Markets will await to see if a cut does take place and the comments that follow thereafter.

Following a raft of mixed data for the UK over the past few weeks, on Thursday we have the Bank of England policy announcement where it is widely expected that interest rate will remain as they are at 5.25 percent. Following the announcement, the MPC will deliver its vote and the comments thereafter should attract interest.

Later in the day on Thursday, for the US we have the employment, PMI, and existing home sales numbers.

To cap off a busy week, UK retail sales on Friday will be closely watched following mixed data over the past few months. February’s release showed a 3.4 percent increase in January, following Decembers (Jan reading) large slump.

A positive retail sales reading could prove a winner & show the economy is picking up. On the back of a strong number, we could see some GBP strength. 

Today’s Bank of England inflation views poll will be looked at for signs that inflation expectations have weakened further. The last report three months ago reported that one-year inflation fell to 3.3%, the lowest level in two years.

The sterling market will, however, focus on next week’s BoE policy announcement (with no change in interest rates predicted) and critical UK data.

PM Sunak appeared to rule out a May general election yesterday, prompting speculation that it will be held in October or November.

Yesterday, markets were digesting the latest US macro news flow. Producer price inflation in February was more than anticipated. The headline PPI rate was 1.6% year on year. Meanwhile, retail sales in February underwhelmed, rising just 0.6% month on month.

Looking ahead to today, the macro focus will continue. The US economy, which has a number of releases scheduled. The diary will include industrial production for February, the regional Empire manufacturing survey, and consumer sentiment for March.

A quiet day for the UK in terms of economic data, therefore attention turns to the US later today.

Investors’ attention will turn to this afternoon where there is a flurry of US figures. Also, over the course of the day there are a number of ECB policymakers that may garner some market attention.

Producer Price Index and Core PPI figures in the US are both set to expand this afternoon. This

indicates that price inflation is rising and is reflecting the higher-than-expected US CPI inflation release earlier this week.

US retail sales is set to rebound in February, suggesting that the US economy is beginning to slowly improve, and that consumer spending is increasing.

There has been low volatility in the FX markets this week. GBPEUR and GBPUSD have both been trading in a tight range as markets anticipate Central Bank monetary policies decisions.

The Bank of England have remained firm on future rate cuts therefore resulting in the Pound being one of the best performing currencies in the G10 this year. Attention will turn to next week as we await UK CPI inflation figures and The BoE interest rate announcement.

According to official numbers released earlier this morning, the UK economy grew again in January.

The measure of everything generated in the UK, known as gross domestic product (GDP), increased by 0.2%, according to the Office for National Statistics.

It is the first official economic growth announcement since a recession was declared last month, following two consecutive three-month spells of negative economic growth.

Over in the U.S In the immediate aftermath of the CPI release, the dollar remained firmer. However, the dollar gave up some of its gains before the close last night. 

However, in early trading, sterling has not been impacted by the report. Later today, Eurozone industrial production figures for January will be announced. Barring any huge surprises, the data are unlikely to have an influence on currency markets.