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The pound-to-US dollar rate remains virtually unchanged from yesterday
Currency movement remained minimal yesterday as the pound appeared to be struggling for direction. It seems investors on both sides of the Atlantic remain cautious ahead of comments from Federal Reserve officials on Friday.
One of the Federal Reserve’s most influential rate-setters, Christopher Waller, said the US central bank should “push back” the timing of interest rates after “disappointing” inflation data.
Speaking yesterday, the Bank of England Financial Policy Committee said, “So far UK borrowers have been resilient to the impact of higher interest rates.”
The bank went on to comment that UK businesses have managed to cope with higher rates but warned small businesses are likely to struggle.
This morning the Office for National Statistics revealed that the British economy contracted 0.3% in the final quarter of 2023, worse than market forecasts of a 0.1% contraction.
In the euro area, the economic sentiment indicator increased in March to 96.3 from 95.5 just a month prior. This was largely supported by an uptick in confidence among manufacturers which soared to a six-month high of -8.8. Consumer confidence also improved.
Later this morning, the German unemployment rate for March is expected to increase slightly from 5.9% to 6.0%. The rate is currently at a three-year high.
At midday, the US GDP growth rate will be revealed for quarter four of 2023. Forecasts expect the economy to have expanded by 3.2%, from a 4.9% expansion in the previous quarter.
Remember, we are closed tomorrow, Friday 29th March, and Monday 1st April. Should you wish to make a transfer or lock in a rate before the weekend, speak to us today.
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: Renting is… cheaper?
British bank Halifax revealed yesterday that first-time buyers might be better off renting than buying in certain parts of the UK than buying due to high mortgage costs. The largest saving in renting-over-buying was found in the South East, where renters saw yearly savings of £1,859 when compared to owning a first home.
GBP/USD: the past year
EUR: Stocks at multi-decade highs
European stocks closed even higher on Wednesday, extending their multi-decade highs amid a strong risk appetite in the US and rumours of a more flexible approach to monetary policy.
GBP/EUR: the past year
USD: Tomorrow’s releases
On Friday, the US economic docket will include Core PCE prices, personal income and personal spending figures. Federal Reserve chair Jerome Powell is also to speak in San Francisco at the Macroeconomics and Monetary Policy Conference.
EUR/USD: the past year
For more on currencies and currency risk management strategies, please contact your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
