Currency Insights

Eurozone Economic Sentiment Index predicted to fall

Spanish and German data today, followed by French data tomorrow, will provide the first indications about June inflation for the Eurozone. Data for the German state of North Rhine-Westphalia earlier this morning grabbed attention for being unexpectedly weak, falling to 7.5% y/y from 8.1% y/y.

US oil prices fall to below $0 a barrel for the first time ever and commodities are affected

Dallas manufacturing index lowest for 2 years

Blogs

The Dallas Federal Reserve’s manufacturing index hit minus 17.7 this month. That’s the lowest reading since May 2020. It may peak the attention of the cautious Fed members who are less enthused by the calls for large and rapid interest rate hikes. The US Dollar remains pretty flat despite that news. GBPUSD is $1.2270 and EURUSD is just below $1.06.

Monday rates déjà vu but we have news

Blogs

The Monday morning exchange rates look eerily like the ones we saw on Friday. There has been some news however. The International Monetary Fund has cut its global economic growth forecast for 2022 from 3.7% to 2.9% and they are forecasting growth of a reduced 1.7% in 2023 and just 0.8% in 2024, when they believe the slowdown will start to reverse. Not the cheeriest of forecasts is it.

GBPUSD cash banknotes on white background

Fed’s ‘unconditional’ commitment to curbing inflation

Blogs

On his second day of testimony to Congress, Federal Reserve Chairman, Jerome Powell pledged an ‘unconditional’ commitment to do whatever it takes to stop inflation from getting out of hand. On the same day, Michelle Bowman, who is a member of the Federal Reserve’s board of Governors, called for a 75 basis point hike at the next meeting, followed by several further 50 BP hikes.

Federal reserve system symbol on hundred dollar bill closeup. US central bank

Fed talks a big-hikes game

Blogs

Jerome Powell, the chairman of the US Federal Reserve was talking about a large interest rate hike in July and his comments were echoed by other members of the Federal Reserve yesterday. The markets are pricing in a 75 basis point hike in July and Mr Powell didn't rule out a full 1% hike to try to temper inflation.

UK inflation pips higher – GBP flat

Blogs

The consumer price inflation index in the UK rose 9.1% in the year to May. That is marginally higher than April’s figure of 9.0% and we would perhaps have expected sterling strength on the back of that data.

Bank of England facade in London in the evening. BoE UK interest rate cut concept

BOE urged to raise rates faster by MPC member, Mann

Blogs

Catherine Mann, a member of the Bank of England’s monetary policy committee, voted for a 50 basis point hike at their last meeting. She is urging the central bank’s other committee members to press for higher rates to curb inflation and support the Pound because a weak pound increases inflation due to sterling’s reduced purchasing power.

USD loses ground as investors gain confidence

Blogs

The darling of the nervous investor class, the US dollar has lost a little ground in the few days as the dust from all the central bank changes has started to settle and the attractiveness of investments outside the US has lured those investors away.

BOE hikes 25BP and pledges more

Blogs

Sterling rose throughout yesterday afternoon after the Bank of England lifted the UK base rate by 0.25% and confirmed it will act aggressively to halt the rise in inflation. 6 of the 9 members of the monetary policy committee voted for a 25 basis point hike while the other three were seeking twice that amount.

Fed raises 75BP – USD weakens

Blogs

US consumers got squeezed tighter yesterday evening when the Federal Reserve raised their base rate by 75 basis points in an attempt to counter inflation. I have never been convinced that this is a sensible option when the inflation they are seeking to contain is forced upon consumers by events elsewhere rather than through retail exuberance but I am not an advisor to the Fed.

GBP slips again as USD gains

Blogs

The strength of the US dollar ahead of today's Federal Reserve interest rate decision is a reflection of the fact that investors are expecting at least 50 basis points from the third and potentially 75 basis points. The USD is already attractive as a safe haven currency and as the currency in which the currently excessively expensive commodities are being traded.

image of two people employed in the manufacturing industry

USD gains as 75BP rise is factored in

Blogs

The financial markets are pricing in a 90% chance that the US Federal Reserve will hike the US base rate by 75 basis points when they meet on Wednesday. The US Dollar index, which measures the US currency against a basket of others, is the strongest it has been since 2002. No surprise then that the GBPUSD rate is down to $1.2185, the lowest we have seen since May 2020.

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