020 7898 0500
The Bank of England's Huw Pill said yesterday rate cuts could come in 2024.
The US dollar rebounded on Friday as investors worldwide turned to the greenback as a safe-haven asset amid rising geopolitical tensions.
The pound continued to plummet against the dollar late last week and lost 0.2% against the euro on Friday. This morning, the pound is close to where it started last Monday against the US dollar and slightly lower against the euro.
All is subject to change, as we know the currency market is prone to fluctuate. If you have a large transfer coming up, speak to your trader about a Forward Contract to help reduce your exposure to currency risk.
The US consumer sentiment fell to a five-month low of 63 in October from 68.1 in September and below forecasts of 67.2. The current conditions gauge fell and inflation expectations for the year ahead rose to 3.8%, the highest since May.
In China, the inflation rate fell to 0% in September from 0.1% a month prior and below expectations of 0.3%. China’s trade surplus narrowed in September to €77.71 bn from €82.67 bn in the same period in 2022 but exceeded market forecasts of €70 bn as both imports and exports declined at the same rate.
On Saturday, Bank of England governor, Andrew Bailey said he was puzzled by the continued strength of pay growth in Britain, which, unlike other areas of the economy, has not yet reacted to the Bank’s rate hiking cycle.
Today, chief economist at Bank of England, Huw Pill speaks on the UK’s economic outlook at the Official Monetary and Financial Institutions Forum.
German wholesale prices dropped 4.1% year-on-year in September 2023, following a 2.7% fall in August. This marks the biggest drop in over three years and the third consecutive period of decline.
This morning we’ll receive the balance of trade figures for the euro area and Italy’s inflation rate for September, which is forecast to drop from 0.2% to 0.1%. Tomorrow brings the ZEW economic sentiment for Germany, followed by a speech from Christine Lagarde on Wednesday.
Tuesday brings the UK unemployment rate for August and economists await the latest inflation rate on Wednesday which is forecast to drop from 6.7% to 6.5%.
For US investors, this week brings retail sales figures on Tuesday, building permits on Wednesday and towards the tail end of the week, the Federal Reserve chair and other US policymakers will speak on Thursday evening ahead of the next interest rate decision, due on October 26th.
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 Business Trader on 020 7898 0500 to get started.
GBP: Will inflation start to fall?
On Wednesday morning, economists forecast the UK inflation rate will fall ever-so-slightly from 6.7% to 6.5%. While a decline is worth celebrating, the rate remains over three times the Bank of England’s target.
GBP/USD: the past year
EUR: Updated eurozone inflation due this week
President of the European Central Bank, Christine Lagarde said on Friday that the Bank’s last dovish interest rate hike could be the last one, but it won’t be the end of monetary restraint.
USD: Spotlight on data this week
For US investors, the key focus will be highly anticipated earnings reports from large businesses such as Tesla, Bank of America, Netflix, and Johnson & Johnson. There are several speeches this week from the Federal Reserve and data includes retail sales, building permits, housing starts, existing home sales and industrial production.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.
