UK optimism priced in?

Market reports
Thanim Islam
  • US CPI comes in hot
  • UK coming out of recession?
Sign up


GBP was marginally lower by the end of the day following on from the morning's job numbers, suggesting a slight cooling of the UK’s job market. USD gained in the afternoon after CPI numbers came in higher than expected, supporting the idea that inflationary pressures are still persisting in the US. Markets still believe that the Fed's first rate cut will be in June but, we will likely learn more on this in next week's Fed meeting.


Market rates

*Daily move - against G10 rates at 7:30am, 13.03.24

** Indicative rates - interbank rates at 7:30am, 13.03.24

Table (91)

Data points

Table (90)


  • GBP: BoE Mann and Bailey

Our thoughts

This morning's GDP number from the UK showed growth rebounded in January, supporting the idea that there are greenshoots of a recovery in the UK. GDP came in at 0.2% as expected from -0.1% in December. Signs of a recovery in the economy will give the BoE more time to wait and see before electing to cut interest rates. GBP is unmoved on the data unfortunately, perhaps on the basis that all the good news is priced in.

US retails sales will be the next major data point out tomorrow. Until then and following on from yesterday's CPI number, we would expect markets to favour USD going into tomorrow's numbers.

Chart of the day

Net market positioning on GBP at the moment is currently at a 6-month high, and is looking overdone, suggesting we could be due a retracement on the bull run on GBP. The RSI in the chart below is a technical indicator used by traders to gauge how stretched a particular market is. A reading above 70 (red line) suggests that positioning is overdone, and below 30 (green line) suggests that positioning is stretched on the downside.

13032024 cotd
Source: Bloomberg Finance L.P.

How we can help

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.


Expert insights on demand

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.