Currency news

Markets await key US growth and Inflation data

Lawrence Kaplin
Profile
Chief Market Strategist at Equals Money
-
3
min read
Publish date
25/04/24
  • GBP: UK Manufacturing falls
  • EUR: German business Sentiment picks up  
  • USD: Awaiting GDP data


Recap

Currency markets saw a rangebound trading session yesterday ahead of today’s key US GDP data for Q1 2024, where growth is forecast to dip from 3.4% to 2.5%.

Sterling managed to eek out small gains despite weaker than forecast CBI manufacturing data, as recent hawkish Bank of England comments continue to push back rate cut hopes.

The euro also made gains after the release of the latest German IFO business climate index rose more than expected. The single currency was also supported after ECB’s Nagel stated a June rate cut would not necessarily be followed by a series of further rate cuts.

Today

Market rates


Currency pair Daily move* Indicative rate**
GBPAUD -0.12% 1.9157
GBPCAD -0.04% 1.7069
GBPCHF -0.05% 1.1398
GBPDKK -0.06% 8.6822
GBPEUR -0.06% 1.1640
GBPJPY 0.28% 194.1500
GBPNOK -0.05% 13.6830
GBPNZD -0.05% 2.0985
GBPSEK -0.04% 13.5510
GBPUSD 0.05% 1.2469

*Daily move - against G10 rates at 7:30am, 25.04.24

** Indicative rates - interbank rates at 7:30am, 25.04.24

Data points


Currency Event Period Consensus Previous
USD GDP Q1 2.50% 3.40%
USD Initial Jobless Claims Apr/20 215k 212k
USD PCE Prices Q1 N/A 1.80%
USD Pending Home Sales Mar 0.9% 1.6%

Speeches

  • EUR: ECB’s Schnabel, and Bundesbank’s Mauderer

Our thoughts

All eyes are firmly focused on US Q1 GDP data due out later today, and tomorrow’s Core PCE report (Fed’s preferred measure of inflation).

At the start of the year markets were pricing in the US to cut interest rates 6-7 times, this has now collapsed to only 1 or 2 as the underlying strength of the US economy continues to defy market forecasts for a rapid slow down, both in growth and inflation.

With the US elections due in November, markets are just beginning to look at how a Trump Presidency would affect the US dollar. Early indications are a Trump Administration will repeat their calls for a weaker currency in order to increase US export competitiveness. During his last tenure Trump repeatedly called on the Fed to cut interest rates to lower the value of the dollar, citing the EU and Japan as deliberately keeping their currencies weak in order to boost overseas trade.

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About the author
Lawrence Kaplin
Profile
Chief Market Strategist at Equals Money

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