Currency news

Hot CPI could spur more USD gains

Head of FX Analysis at Equals Money
-
3
min read
Published:
November 13, 2024
  • EURUSD: Falls to new 2024 low
  • USD: Potential to strengthen


Yesterday's currency recap

GBP was broadly lower yesterday, as markets showed concern that wage growth was proving to be sticky whilst the unemployment rate worryingly increased in the three months leading up to September. USD continued to eke out additional gains as treasury yields continued to rise ahead of todays CPI numbers. GBPUSD found new lows and EURUSD hit fresh 2024 lows.

Today's GBP rates

Currency pair Daily move* Indicative rate**
GBPAUD -0.26% 1.9521
GBPCAD -0.83% 1.7766
GBPCHF -0.84% 1.1240
GBPDKK -0.55% 8.9576
GBPEUR -0.55% 1.2008
GBPJPY -0.38% 197.0280
GBPNOK -0.40% 14.1352
GBPNZD -0.25% 2.1518
GBPSEK -0.24% 13.9184
GBPUSD -1.00% 1.2731


*Daily move - against
G10 rates at 7:30am, 13.11.24

** Indicative rates - interbank rates at 7:30am, 13.11.24

Key data points

Currency Event Period Consensus Previous
USD Core CPI MoM Oct 0.30% 0.30%
USD Core CPI YoY Oct 3.30% 3.30%
USD CPI MoM Oct 0.20% 0.20%
USD CPI YoY Oct 2.60% 2.40%

Upcoming speeches

  • GBP: Bank of England's Mann (9.45am GMT)
  • USD: Federal Reserve's Kashkari & Logan (1.30pm & 2.45pm GMT, respectively)

What we think

As we've recently witnessed, USD has been favoured by markets in the belief that the Trump administration will put inflationary pressures on the US economy, thus seeing markets unwind rate cuts by the Federal Reserve (Fed). As such, today's CPI numbers will be closely examined to determine if we see a further unwinding of these rate cut bets and subsequent further gains for USD.

For GBP, it was very interesting to note the price action yesterday where the pound fell on the higher unemployment number instead of trading higher on the sticky wage number. Perhaps more focus is falling on economic growth rather than where interest rates will be? It's worth remembering markets have been positioned long on GBP for most of this year already. The basis for this was the idea that the markets had already priced the Bank of England (BoE) to administer the least amount of rate cuts in their easing cycle this year compared to their peers. So perhaps this factor for GBP is fully priced in now? One thing is certain: it brings Friday’s GDP number into focus – let's see how the market reacts.

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