Currency news

USD and Fed Powell in focus

Head of FX Analysis at Equals Money
-
3
min read
Publish date
12/06/24
    • EUR rocked by rumours of Macron resignation
    • USD to be guided by CPI and Fed dots


    Yesterday's currency recap

    The EUR was rocked yesterday as speculation surfaced that French President Emmanuel Macron was set to resign ahead of the French elections. However, these rumours were swiftly refuted. But once again this highlights what we said in yesterday's report that whilst the EUR has a political risk premium attached to it, it will be susceptible to sudden bouts of weakness on negative data or news stories.

    GBP was marginally higher across the board despite the morning's data suggesting that the UK job market was cooling.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.13% 1.9286
    GBPCAD 0.01% 1.7518
    GBPCHF 0.18% 1.1434
    GBPDKK 0.27% 8.8447
    GBPEUR 0.27% 1.1859
    GBPJPY 0.12% 200.1220
    GBPNOK 0.76% 13.6576
    GBPNZD -0.10% 2.0753
    GBPSEK 0.24% 13.3763
    GBPUSD -0.05% 1.2723


    *Daily move - against G10 rates at 7:30am, 12.06.24

    ** Indicative rates - interbank rates at 7:30am, 12.06.24

    Key data points

    Currency Event Period Consensus Previous
    USD CPI MoM May 0.10% 0.30%
    USD CPI YoY May 3.40% 3.40%
    USD Core CPI MoM May 0.30% 0.30%
    USD Core CPI YoY May 3.50% 3.60%
    USD Fed Meeting May 5.50% 5.50%

    Upcoming speeches

    • None today.

    What we think

    UK GDP for April came in at 0% down from 0.4% in March, suggesting cooling growth in the economy. Market reaction has been muted thus far and the data should have minimal impact on the Bank of England's rate policy.

    So all eyes on USD flows today with the CPI report and the Fed Dot Plot in the evening. We had strong job numbers on Friday which saw USD buying across the client base, hedging their bets in case further USD gains. A higher-than-expected CPI reading and a hawkish Fed Dot Plot will likely lead to further USD gains as markets will ease bets on expecting a rate cut this year.

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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