Dollar back en vogue

Market reports
Thanim Islam
  • Dollar higher for third consecutive week
  • GBP suffers on back of poor retail sales
  • FX action this week will begin from Wednesday
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Markets were a quiet affair on Friday as volatility decreased and equity markets marched on higher. GBP continued its losses from the morning following that disappointing retail sales number and USD finished higher for the third consecutive week.


Market rates

* Daily move - against G10 rates at 7:30am, 22.01.24

** Indicative rates - interbank rates at 7:30am, 22.01.24



  • None today.

Our thoughts

Much of the action this week will begin on Wednesday as we get initial PMI numbers across the UK, EU and US. We have seen a pick up in economic activity in recent months and we look to see if this continues to allay recession fears.

On Thursday we have the latest ECB meeting where we expect no change in interest rates but emphasis by the Bank on economic data to suggest when the first rate cut will happen – currently, markets are pricing in a cut in April. US GDP numbers for Q4 are expected to show a slowdown in growth from 4.9% to 2% and then on Friday, we have the core PCE inflation number which will either ease the expectation of a March rate cut OR reverse some of the probability from last week.

USD is starting the week marginally weaker on the back of increased risk appetite as US stock markets hit all-time highs on Friday and futures are pointing to another higher start today It will likely be a quiet start to the week with FX rates consolidating around current levels before we see the PMI numbers on Wednesday.

Chart of the day

USD finished higher again last week for the third consecutive week as markets continued to ease the number of rate cuts for this year. This could well continue this week should we see PMI numbers and GDP numbers come in higher indicating better performance in the economy as well as higher print on the core PCE inflation numbers.

Source: Bloomberg Finance L.P.

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