Currency news

GBP trading well ahead of inflation tomorrow

Thanim Islam
Profile
Head of FX Analysis at Equals Money
-
3
min read
Publish date
21/05/24
    • Fed speakers and Bailey on the mic today
    • Client focus remains on tomorrow's inflation report


    Yesterday's currency recap

    GBP traded higher following the general higher risk appetite in markets. Money markets eased some of the odds of a June rate cut by 5bps, as well taking the pressure off GBP. Trading around USD was relatively tight as well with treasury yields marginally higher.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.30% 1.9035
    GBPCAD 0.05% 1.7298
    GBPCHF 0.08% 1.1559
    GBPDKK 0.10% 8.7280
    GBPEUR 0.10% 1.1698
    GBPJPY 0.32% 198.3110
    GBPNOK 0.20% 13.5870
    GBPNZD 0.38% 2.0785
    GBPSEK -0.20% 13.5917
    GBPUSD 0.03% 1.2704


    *Daily move - against G10 rates at 7:30am, 21.05.24

    ** Indicative rates - interbank rates at 7:30am, 21.05.24

    Key data points

    Currency Event Period Consensus Previous
    CAD CPI MoM Apr 0.50% 0.60%
    CAD CPI YoY Apr 2.70% 2.90%

    Upcoming speeches

    • USD: Fed Barkin, Waller, Williams, Bostic, Barr
    • GBP: BoE Bailey

    What we think

    Quiet day ahead with only the Canadian CPI numbers out in the afternoon, as well as a host of Fed speakers and BoE Bailey. Client focus remains on UK CPI numbers tomorrow morning, and whether the data will add to the probability of seeing a rate cut by the BoE in June as opposed to August. GBP has been trading higher steadily going into the numbers suggesting that perhaps the services CPI number won't fall as much as expected, given that in 2022 and 2023 we saw big price spikes in April. As mentioned in yesterday's report the key focus will be on the services and core component to dictate which way GBP travels going into June's CPI release & the BoE meeting.

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

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