020 7898 0500
US inflation surprised yesterday, which helped to dramatically boost the US dollar.
Markets were awry yesterday as the US inflation rate accelerated more than expected to 3.5% in March, compared to 3.2% in February and forecasts of 3.4%.
The US dollar soared over one per cent against the pound and euro following this announcement and the USD/GBP pairing soared to a two-month high.
Another currency flattened by strong US data was the Canadian dollar, which weakened close to a five-month low yesterday as the strength of the US dollar overshadowed the Bank of Canada’s decision to hold key interest rates at 5.0%.
Yesterday, European Parliament president, Roberta Metsola, said ‘history made’, as the vote to pass changes to the asylum and migration pact after eight years of deadlock. The vote has been criticised by NGOs, far-right, and far-left activists. Metsola called the pact, a “balance between solidarity and responsibility.”
The Home Office revealed that the cost of a new or renewed UK passport will increase for the second time in 14 months, after being unchanged for five years. From today, the new cost for an adult online application is £88.50 and £100 by post.
Today, all eyes are on the European Central Bank which is due to make its latest interest rate decision just after lunch. Market forecasts suggest the rate will remain unchanged at 4.5%, where it has remained since September 2023.
Later in the day, US PPI figures for March are expected. Current forecasts expect the index for final demand to have grown by 0.4% month-over-month in March, following the largest increase of 0.6% since last August in February.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: GDP figures due tomorrow
On Friday morning investors will hear whether UK GDP flatlined in February, as forecasts suggest. This comes following 0.2% growth in January.
GBP/USD: the past year
EUR: Talk of euro touching parity with US dollar
The euro remains under pressure this week as policymakers at the European Central Bank seem primed to deliver more interest-rate cuts than their American peers. This afternoon, the ECB is expected to keep rates unchanged at 4.5% but may shed light on when the first cut will take place.
GBP/EUR: the past year
USD: US mortgage rates rose to 7%
At the end of last week, the average contract interest rate for a 30-year fixed-rate mortgage rose to by 10 basis points to 7.01%, soaring to the highest level in five weeks according to the Mortgage Bankers Association data.
EUR/USD: the past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
