Fed signals pause in interest rate hikes – will the ECB help or hinder...
The US Federal reserve announced last night that they would be raising interest rates for the 10th consecutive time. The move raised US interest rates by 25 basis points up to 5.25%, the highest level since 2007.
In general, interest rate rises can lend support to the value of the currency, however, the US dollar lost ground across the board following the Fed’s announcement. The Fed indicated that future interest rate rises could be limited given the potential restraint on the economy. Markets have digested...
How will the pound react to the latest US, Eurozone and UK Interest Rate...
We have a potentially volatile few trading sessions coming up as investors gear themselves for the latest US, Eurozone and UK interest rate decisions. Markets remain slightly nervous over the banking liquidity fears which surfaced some weeks ago, it will be interesting to see the latest take on this and other issues from the central banks.
Our friends at the US Federal Reserve commence proceedings tonight where it is predicted they will be raising interest rates a quarter of a point. Banking stocks continue to...
Will Sterling’s strong end to April carry over into May?
Sterling exchange rates ended the month of April on a high after posting gains on Friday, with GBP/USD hitting the financial headlines as it traded near an 11-month high.
Despite GBP/USD softening slightly since Friday’s highs, the pair are currently trading roughly 1.5 cents from the annual high of 1.2667.
On Friday cable (GBP/USD) broke above 1.25 and climbed as high as 1.2580 at one stage. This move was mostly due to US Dollar weakness as the FED Reserve struggles to counter increasing inflation levels in...
Sterling in a strong position ahead of early May bank holiday
Economic data released at the end of last week showed positive and negative signals for the UK’s economic outlook. UK retail sales are down 3.1% year-on-year and 0.9% month-on-month. The monthly figure is worse than expected with markets expecting a negative reading of 0.5%.
PMI data showed some positive signs but was once again mixed. Services PMI trumped expectations of 52.9 with a reading of 54.9. However, manufacturing PMI was lower at 46.6 vs expectations of 48.5. A reading above 50 signals an expansion within...
Sell in May, Go Away ! Will the pound be weaker next month?
Will the pound weaken in May? Well, on observing the last seven years, we notice the old adage of “sell in May, go away”, ringing true for sterling on six out of those seven occasions. Our FX research teams have been busy analysing the data, to try and give our clients the most relevant facts to support their decision making.
The average move lower we have noted is around 2.4%, from the two-month period start of May to end of June. On a £100,000 transaction,...
Pound to Euro Rate Drops into the 1.12’s, hitting a 1-month low
Earlier in the month the GBP to EUR exchange rate was trading around the highest levels of 2023 so far, although since then, we’ve seen the Pound drop off and this morning the pair are trading in the 1.12’s.
The GBP/EUR pair climbed above 1.1450 at one stage, so in the space of just a few weeks there has been a gradual decline for the pair, despite the Pound climbing against some other major currency pairs.
Expectations of further interest rate hikes are now more likely...
UK inflation remains high – will the BoE give the pound a boost?
UK inflation remains high – will the BoE give the pound a boost?
Economic data released yesterday shows UK inflation (CPI) remains elevated above 10.1%. Forecasters were expecting inflation to fall to 9.8% following last month’s reading of 10.4%. The inflation reduction is positive for the UK and was largely driven by a fall in fuel and oil prices. However, food prices continue to rise as the UK consumer feels the squeeze of the continuing cost of living crisis.
Sterling exchange rates have remained relatively unchanged...
Bank of England poised to raise again as high Inflation continues to cause problems
The pound has benefitted from the now apparently locked on expectations the Bank of England will raise interest rates at their next meeting Thursday May 11th.
This morning's Inflation reading has confirmed Inflation remained above 10% in March, coming in at 10.1%, a small decline from 10.4% of February but higher than expected.
Headline grabbing inflation for food costs, coming in at a 45-year high will leave the Bank with little choice in being forced to act to tackle rising prices.
The good news is that Inflation...
UK avoids recession – will the pound strengthen moving forward?
Pound Sterling has been range-bound against many of its major counterparts over the last two weeks. Most notably, GBPEUR which has traded within a cent from the high to low. Cable (GBPUSD) has traded within a 2-cent range and struggled to find support above the 1.25 handle.
The pound has strengthened in value due to the revised UK economic forecasts, however, it would seem the positivity has ended here for the pound and that new data will be needed to push the pound out of...
Will the pound continue to rise against the US dollar and Euro?
Sterling has been performing much better lately after improvements in the UK's economic outlook combined with expectations that the Bank of England will be looking to raise interest rates sooner and potentially higher than previously expected.
Looking to the latest interest rate outlook, the Bank of England has been earmarked to raise interest rates in the future at some stage but this might well need to happen sooner than expected.
Overall, UK interest rates are not set to be raised until the next meeting in early...
