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UK: Market Wire "Sterling has been consistently under pressure after the Bank of England rate cut on August 1st. There is a host of UK economic data for release this week, including Average Earnings, CPI, GDP and Retail Sales. Will these data releases show a growing UK economy or one about to slow down again?" To read the full report from our Senior Market Strategist, Trevor Charsley and sign up for our weekly updates please click here: https://hubs.ly/Q02KVxYR0 #fxmarkets #marketanalysis #internationalpayments #fxhedging #inflation #payments #uk

📊 US data is the focal point today 💲 A quiet day for the UK in terms of economic data, therefore attention turns to the US later today. 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 policy 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. ✉️[email protected] ☎️ 0207 183 7928 #economicdata #policydecisions #money #uk

A quiet start to the week with only the UK CBI Distributive Trades Survey and US New Home Sales data due. The pound remains well supported holding onto its highs from last week against the euro. We have seen a dip in the dollar rate, losing around half a percent from its highs last week. Volatility in markets has declined a little as expectations of central bank rate cuts continue to recede. In the US, a first cut is now not expected until June. For the UK and the EU, a number of policymakers all said that rate reductions need to proceed cautiously. A number of policymakers for both the UK and EU will be speaking today. For the UK, there will be two policymakers who both voted to keep rates on hold at the last BOE rate meeting. Markets will keep a close eye on them to see what it would take for them to switch their votes in favour of a rate cut. The rest of the week is fairly quiet for the UK, therefore attention should shift more over to the EU. Particular interest will be on the Eurozone monthly CPI inflation data. #bankofengland #federalreserve #ecb #hedging #hertschambers #imsfx #pound

Here are the key takeaways from the US CPI report for March released Wednesday:

GBP has managed to stay above the 1.260 mark this morning despite the Fed’s Waller saying yesterday that the US central bank was in no rush to cut rates with sticky inflation numbers. The Pound could stage a recovery if it stabilises above 1.2590/1.2600. The EUR/GBP fell below 0.8570 as German Retail Sales data for February remains weaker than expected. Poor retail sales could force ECB policymakers to discuss further reducing interest rates early. On Tuesday, ECB’s policymaker Muller said they were close to the point where the ECB can start cutting rates, whereas BoE’s Haskel hinted that rate cuts were a long way off despite a fall in headline inflation. GBP could well strengthen against the EUR as market sentiment on interest rate differential shifts.

At their meeting yesterday, the RBA held the cash rate steady at 4.35% after speculation whether or not the board would raise interest rates in response to the latest CPI data and overseas developments Here are my thoughts 💬 : ·       A justified decision as Australia is still feeling the effects of the contractionary monetary policy imposed post-COVID – I think any subsequent increases to the OCR would have little effect in the short term due to the large outside time lag. ·       Developments overseas appear concerning and are ever-changing, as usual. Such as the recent unemployment data out of America (only one number though) and other central banks relaxing monetary policy (yet still eagerly watching inflation) could influence the RBA’s decisions. ·       The stickiness and multi-variate factors of the inflation make the path to the 2-3% target ‘bumpy.’ ·       Thus, rates may not come down for a considerable amount of time. Ultimately, cutting rates is dependent on whether aggregate demand and supply are coming back to ‘equilibrium’ and alas, future rate cuts may be on the table… Let me know your thoughts below 🔽

🌟 If you’re considering buying USD, now might be an opportune moment. ↗ Here’s why: Recent Strength: The GBP/USD exchange rate has surged in July, currently hovering around 1.29800. This level hasn’t been seen since July 2023. ↗ US Inflation Data: Keep an eye on this weeks news announcements that could slow down this explosion, today we have Fed Chair Powell speaking, Tuesday we have Retail figures in the US, Wednesday UK CPI data, Friday is US Unemployment claims and finishing on Friday with GBP Retail sales... ↗ Market Sentiment: The Pound (GBP) has capitalised on improved sentiment toward the UK economy and shifts in US interest rate expectations. As the chances of a September Fed rate cut exceed 90%, the US dollar is on a softer footing. Remember, currency markets can be volatile, so consider your risk tolerance, is now the time to be buying USD, if you do want to discuss this opportunity and any other currency pairs, drop me a message 📈💵 #GBPUSD #USD #UNITEDSTATES #BIDEN #TRUMP

Here is what to keep an eye out for this week in the FX markets: Monday: USD/ Retail sales Tuesday: GBP/ Unemployment rate GBP/ Claimant count change GBP/ BoE's Governor Bailey speech Wednesday: GBP/ CPI (MoM)(YoY) GBP/ BoE's Governor Bailey speech EUR/ Core Harmonized Index of Consumer Prices (MoM)(YoY) Friday: GBP/ Retail sales #economy #foreignexchange #data

Today is a busy day in terms of economic data with the EU inflation figures due at 10am followed by the ECB’s interest rate announcement in the afternoon.   Later today, we have the US retail sales & Industrial production figures due.   The ECB interest rate announcement at 1.15pm will be the main focus today.   There is very high expectation rates will be cut again today for a second consecutive time, following clear evidence of a slowing economy and inflation rates dropping to its lowest level in some time.   The comments that follow thereafter by ECB president Christine Lagarde will as always be carefully monitored for clues on the banks future expectations and rate cuts.   A rate cut in December is already looking likely and is widely expected by markets.   The ECB is unlikely to alter its expectations on future rate cuts, therefore we could see a fairly resistant euro on the back of this, unless of course there are surprises.   US retail sales are expected to come in at 0.3 percent, higher than last month’s 0.1 percent figure.   The dollar is well supported on the back of global negativity and has gained 3.5 percent against the pound over the past month.   GBP dropped following softer-than-forecast UK inflation data at the start of the week raising the odds of bank rate cut in November. #keeptheheartinherts #hertschamber #hedging #inflation #interestrates #dollar #pound #euro

This week, markets will look out for the Bank of England policy meeting on Thursday, where the central bank is anticipated to maintain status quo. Following recent rate cuts by the ECB and Bank of Canada in early June, market attention has turned to the timing of rate cuts by the BoE. Market expectations have shifted to pricing in one rate cut by the BoE in 2024, starting in September, down from earlier expectations of two rate cuts. In addition, investors are likely to closely watch UK’s May inflation print, which will be released a day before the BoE meeting. CPI inflation is expected to ease to 2% from 2.3% in Apr-24 while core CPI is expected to remain above 3% in May-24 (consensus expectations: 3.5% YoY). A dovish statement by the BoE coupled with softer CPI (and more importantly services inflation) could further influence market sentiment and weigh on the Cable (The GBP/USD pair is currently trading at 1.2699 vs. its previous close of 1.2703) in the near term. Dollar Index view: The DXY eased to 105.32 on Monday (vs. its previous close of 105.55) amid some recovery in the Euro. This week, the DXY trajectory is likely to be contingent on US retail sales data (due today), as well as comments from various Fed officials. Weaker than expected retail sales data (consensus expectations: +0.3% MoM in May-24 vs. 0% in Apr-24), coupled with dovish remarks from Fed officials could weigh on the DXY. However, we do not see the DXY sustainably moving below 105.0 in the near-term given lingering political uncertainty in the Eurozone and US interest rate differentials with other DMs.