Category Archives: FX News

With no significant economic data scheduled for today, market attention will shift to key UK data releases later in the week.
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Money News Overview Tuesday 2nd January 2024: PMI releases dominate the start of the year

A new year begins with a flurry of PMI releases across Europe and the UK, with markets forecasting the UKs manufacturing sector to fall to 46.5 from 47.2. This remains well off the 50-point figure that markets use as a benchmark indicator to see if there is growth in the that specific sector.

Later this week, there are some key inflation figures being released in Europe with German inflation data being released on Thursday. Markets expect inflation to rise to 3.8 percent which is an increase of 0.6 percent.

Alongside the release of German inflation, the eurozone will release their figures which markets are also expecting inflation to rise to 3 percent, up from 2.4 percent. This potentially signals that the rate cuts the European Central Bank have been implementing are yet to take full effect.

On Friday, markets also see the release of US Employment figures along with their ISM Non-Manufacturing Survey.

On the currency front, the pound has started the new year on the front foot against both the dollar and the euro, with the pound toying with 5-month highs against the dollar.

Pound vs Euro exchange rate reaction to tariffs
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Money News Overview Friday 22nd December 2023: UK retail sales rise in November

The final UK Gross Domestic Product release this year, showed the total value of goods and services produced in the third quarter of 2023 decreased by 0.1 percent increasing the likelihood of a recession.

UK retail sales increased 1.3 percent in November, with Black Friday sales boosting this figure.

The total value of sales by retailers in the UK, excluding fuel released at 1.3 percent in December, jumping 0.7 percent from the forecasted 0.4 percent rise.

The Pound has been on a downward trend against the Euro, after UK inflation figures released lower than expected at 3.9 percent earlier this week – placing pressure on the Bank of England to cut interest rates promptly.

This afternoon, there is a mixture of US economic data that investors will keep a close eye on throughout the day.

Pound rises as dollar hits 3-year low
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Money News Overview Thursday 21st December 2023: It’s beginning to look a lot like…rate cuts

The British Pound dropped swiftly following the release of UK inflation figures that were lower than expected, but there are reasons to assume that losses can be limited.

The unanticipated drop in headline CPI inflation to 3.9% year on year was the type of surprise that may significantly impact expectations for the UK economy and interest rates.

Markets anticipate the Bank of England to act quickly to lower inflation, with over 125 basis points of rate reduction expected in 2024, with the first cut priced in as early as March.

US Consumer Confidence Index increased more than expected in December. The index increased from 101.0 to 110.7, surpassing the 104.0 consensus. Existing-home sales unexpectedly increased in November. Both data reports raised expectations that the US economy will continue to thrive strongly in 2024. 

Today’s key data releases are from the United States, in the form of weekly unemployment claims and the Philly Fed Business Survey. However, unless there are any huge shocks, the figures are unlikely to have an impact on markets.

Yesterday, the BoE MPC voted 5 to 4 in favour of a 25bps rate drop. In the run-up to the announcement, markets anticipated a close call, with pricing leaning slightly towards a rate drop.
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Money News Overview Monday 30th October 2023: Markets await Bank of England policy announcement later in the week

This week we have the Bank of England policy announcement that will take centre stage on Thursday.

The pound has had a negative run of late following the Bank of England’s decision last month to not raise interest rates.

This week’s policy announcement is expected to confirm the Bank will not be increasing rates for a second consecutive month. Markets will be keen to see what kind of comments come out of this meeting and what the long-term view is going forward regarding interest rates.

GBP remains rangebound against the euro with very little movement over the past week, but it is expected that the Bank of England’s policy announcement could break the deadlock and either push it lower to fresh multi-month lows or even prompt a rebound.

This week’s highlight for the Euro will be the release of the Eurozone inflation figures for October.

For today, German GDP flash estimates for the quarter have come in a little better than expected. Later in the morning we have the Business & Consumer Confidence figures for the EU, followed by German CPI numbers later this afternoon.

For the UK, we have the Mortgage Approvals and Lending figures due this morning. Finally, to confirm there is no US data due today. 

FX market trends
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Money News Overview Friday 27th October 2023: ECB keeps interest rates on hold

The ECB left policy unchanged yesterday for the first time since June 2022. President Lagarde reaffirmed at the press conference that the ECB will keep interest rates at a sufficiently restrictive level for as long as it takes to return inflation to target. Despite the recent slowdown in business, this suggests that rate cuts are not now on the table.

The focus will shift to the remaining economic statistics due ahead of the Bank of England and US Federal Reserve policy announcements next week.

of importance are from the United States. In September, core-PCE inflation is expected to fall to 3.7% from 3.9%. Meanwhile, consumer spending and income are expected to remain strong in September.

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