Currency news

USD firms on higher PMI

Head of FX Analysis at Equals Money
-
3
min read
Publish date
24/05/24
    • Stronger PMI numbers see markets price December rate cut
    • GBP remains near highs despite poor retail sales


    Yesterday's currency recap

    PMI numbers from the US surprised to the upside in May, accelerating to the highest levels since April 2022, causing markets to scale back when they expect the Fed to cut interest rates this year, resulting in a stronger USD across the board. UK numbers disappointed coming in lower-than-expected, and the EUR was disappointed on two fronts, (i) Higher PMI numbers, (ii) Higher Q1 wage growth numbers. GBPEUR drifted lower from near-2024 highs as a result.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD -0.16% 1.9183
    GBPCAD 0.01% 1.7417
    GBPCHF -0.15% 1.1627
    GBPDKK -0.04% 8.7640
    GBPEUR -0.04% 1.1745
    GBPJPY 0.16% 199.7260
    GBPNOK -0.51% 13.5513
    GBPNZD -0.28% 2.0799
    GBPSEK -0.13% 13.6398
    GBPUSD 0.02% 1.2718


    *Daily move - against G10 rates at 7:30am, 24.05.24

    ** Indicative rates - interbank rates at 7:30am, 24.05.24

    Key data points

    Currency Event Period Consensus Previous
    USD U. of Michigan Sentiment May Final 67.70 67.40
    USD U. of Michigan 1 Yr Expectation May Final 3.40% 3.50%

    Upcoming speeches

    • EUR ECB Nagel, De Cos
    • USD – Fed Waller

    What we think

    Conversations across the client base continue to focus on the impact of the upcoming election on GBP, and so far there isn’t much to comment on given the muted market reaction. Labour are clear leaders in the opinion poll, and both frontrunners (so far) are not promising any radical changes in fiscal policy. It's early doors still and things will likely change in the build up, but for now GBP moves will likely be dictated by interest rate projections and economic performance.

    This morning's UK retail sales were disappointing, showing a 3% drop in sales year-on-year in April and March’s numbers were revised lower as well – initial GBP losses have eased off. USD gains are continuing this morning following yesterday’s PMI numbers, and ahead of today's University of Michigan numbers this afternoon.

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

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