Current Affairs
Doom & Gloom Sentiment for the UK & Eurozone
GBP As expected, there was a lot of volatility in the market last week. Elevated interest rate hike expectations provided Sterling with strength at the beginning of the week, with GBP|EUR peaking at 1.1770 and GBP|USD at 1.2800. However, the run for Sterling was short lived as more doom and gloom of a UK recession…
Read MoreStrong Wage & Inflation Data Provide Support for Sterling amid Recession Concerns
GBP Wage growth and inflation data were both reported stronger than expected last week. The ONS reported “In April to June 2023, the annual growth for regular pay (excluding bonuses) was 7.8%. This is the highest annual growth rate since comparable records began in 2001.” Statista reported “UK inflation rate was 6.8 percent in July…
Read MoreTurbulent Week for the Pound Ahead
GBP Anticipation of more interest rate rises from the BoE surfaced last week, helping breathe some strength back into the Pound, which was much needed after a week of gloomy data releases around the UK economy. RICS (Royal Institution of Chartered Surveyors) reported that the outlook for the UK housing market is reaching levels not…
Read MoreIs the Rate Hike Cycle Finally Coming to an End?
GBP Sterling had been volatile anticipating the Bank of England’s rate hike decision last Thursday, with investors and speculators trying to guess the outcome. The BoE voted for another 0.25% increase in interest rates. This coupled with July’s negative PMI data, along with negative UK house price data sent the Pound falling against most of…
Read MoreWill Thursday’s Decision Provide Further Strength for Sterling?
GBP After falling to multi-month lows against the Euro after inflation data, Sterling has started to regain some ground, outperforming most G10 currencies last week. Most of the movement for GBP|EUR & GBP|USD was driven by factors on the other side of the pair rather than Sterling itself. However, this could change next week, depending…
Read MoreIs BoE’s Monetary Policy finally working?
GBP Following the release of UK inflation figures on Wednesday, Sterling dropped against all G10 currencies. Official inflation for June was confirmed at 7.90%, a 3.0% drop compared to market expectations and a 0.80% drop from last month’s figures. These figures are still way above the BoE’s target rate of 2%, however, is the drop…
Read MoreRecessions, Inflation & Rate Hikes
GBP Strong employment data saw Sterling take a jump at the back end of last week, bolstered by record wage growth and elevated rate hike bets. We’ve now seen 13 consecutive hikes, with rates being the highest since April 2008. Another hike seems more than likely on the BoE’s next decision on August 3rd. BoE…
Read MoreBoE Rate Hike Expected
GBP The pound rallied by just under a percent last week versus the dollar as markets priced in 15bp of tightening by the Bank of England by the December 2021 meeting with a further 75bp expected next year. This led to cable being at it’s highest since the start of October which has taken the…
Read MoreHawkish BoE Helps Sterling Recover
GBP The pound has had a good start to October recovering by 1.6% versus the dollar and 2% against the euro. This rally has been fuelled by the recent reactions from central bankers to rising inflation rates with the Bank of England being seen as the first to raise rates. This was further backed up…
Read MoreJobs Report Key for Further Dollar Strength
GBP The pound weakened against every G10 currency last week as the markets lost conference in the UK economy due to energy and stagflation concerns. What is most concerning for sterling is this weakness wasn’t reversed with hawkish comments from Andrew Bailey and the OIS curve indicating that a markets have priced in a interest…
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