Tag Archives: USD

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.

Meanwhile, the meeting summary, minutes, and press conference provided virtually little insight on the future course of policy.

Data-wise, the US manufacturing ISM for July fell considerably below the consensus of 48.8, to 46.8. New orders and employment were very low this month.

Meanwhile, US first unemployment claims increased to +249k, the biggest amount in nearly a year. In the Eurozone, the unemployment rate increased to 6.5% in June (compared to 6.4% forecast).

Yesterday, market rate expectations fell as a result of the BoE’s move to decrease interest rates and data disappointments in the United States and Europe. The Eurozone is forecast to ease policy by around 55 basis points between now and the end of the year, while rate cuts of 85 basis points and 40 basis points are priced in for the US and UK, respectively.

Looking ahead, payrolls are predicted to grow by 175k, down from +206k in June, while the unemployment rate remains at 4.1%. The announcement may affect the dollar.

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.

Last night the USA released their latest Monetary Policy Statement, as expected the interest rate has stayed the same, markets are growing increasingly confident that a rate cut in September could be on the cards.

Stealing the show today is the Bank of England, they will announce their latest interest rate decision with forecasts showing no cuts this month.

Focus will then shift to the meeting minutes, investors will be keen to listen in to the Bank of England’s stance on a September rate cut.

Later this afternoon sees the US release Employment figures and Purchase Manager Index, with the latter expected to come in at 48.8, an increase in last months figure but still below the 50 growth mark.

The pound has taken a hit this morning following the release of last nights Fed interest rate decision, as of this morning the pound is down 60 points.

The same can be said for the pound/euro pairing, with the pound falling 40 points.

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.

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.