Currency news

Strong US manufacturing data sends dollar to fresh 2024 highs

Lawrence Kaplin
Profile
Chief Market Strategist at Equals Money
-
3
min read
Publish date
02/04/24
  • GBP: Shop Price Inflation slows
  • EUR: Awaiting key inflation data
  • USD: Fed’s Powell “in no rush to raise interest rates”


Recap

The US $ Index traded at fresh yearly highs after a combination of stronger-than-forecast US manufacturing activity and hawkish commentary from Fed Chair Powell. US bond yields surged, with markets now reducing their expectations of a June rate cut to 50%, and interestingly are now only pricing in a total of 65 basis points reduction for the year, which is less than the Fed’s own forecast of 75 basis points. This is in stark contrast to only a few months ago where markets were pricing in 150 basis points of cuts through 2024.

Elsewhere, UK Shop price data out this morning will give encouragement to the Bank of England and consumers alike, as the BRC survey showed prices rising at their slowest pace in more than 2 years, with headline store inflation rising 1.3% versus the previous month's 2.5% rise.

Today

Market rates

*Daily move - against G10 rates at 7:30am, 02.04.24

** Indicative rates - interbank rates at 7:30am, 02.04.24

Table - 2024-04-02T084054.380

Data points

Table - 2024-04-02T084058.049

Speeches

  • USD: Fed’s Bowman, Williams, Mester, and Daly

Our thoughts

The strength of the US economy continues to defy forecasters, with recent manufacturing data showing growth for the first time in 1.5 years causing a huge re-pricing across the Bond and interest rate markets. The US dollar is also attracting further inflows after US Fed Chair Powell dialled back expectations of early rate cuts. All eyes will now be on Friday’s US monthly employment report where payrolls are expected to increase by 200k and the unemployment rate to hold steady at 3.9%.

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.

International payments made simple
Find out more
About the author
Lawrence Kaplin
Profile
Chief Market Strategist at Equals Money

Still have questions?

This is some text inside of a div block.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

This is some text inside of a div block.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

This is some text inside of a div block.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.