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