GBP initially tried to claw some gains this week, after BoE chief economist Huw Pill almost backtracked on his comments from earlier in the week when he implied we could see interest rate cuts in 2024. His comments yesterday suggested that interest rates will need to stay higher for longer. However, despite those comments and the higher risk appetite in the markets, GBP still declined with money markets still keeping their bets on for rates coming in from August 2024.
We had another deluge of Fed speak today, attempting to counter the markets dovish thoughts on future Fed policy. This continued into the evening when Fed chair Powell suggested not to read too much into softer inflation numbers, and that another rate hike could not be ruled out. Treasury yields spiked, equities dropped and USD continued to gain.
* Daily move - against G10 rates at 7:30am, 10.11.23
** Indicative rates - interbank rates at 7:30am, 10.11.23
UK GDP came in better than expectations this morning, surpassing the expectation of contracting by 0.1% Q3. But the numbers weren’t really anything to celebrate, with growth coming in at 0%, and delving deeper into the data the domestic components of the numbers were in fact negative. GBP continues to trade lower as a result. Quiet rest of day, with just the University of Michigan sentiment figures in the afternoon. Following on from Fed Powell's speech, the USD is likely to gain to finish the week higher.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 17 years we’ve helped over a million customers and last year alone processed over £9.1bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
Sign up to our daily market reports to get the latest news and insights on worldwide currency movements straight to your inbox every morning.
Enter your email address below to subscribe.
