UK: Weekly FX Market Update 23 September

GBP

• With the Bank of England trailing behind the Federal Reserve and European Central Bank regarding interest rate cuts, so GBPUSD and GBPEUR both made new 2024 highs.

• Bank of England Governor Bailey said that the Bank should be able to cut rates ‘gradually over time’.

• Consumer confidence for August dropped by the most in two and a half years in anticipation of a ‘painful’ budget.

• Purchasing Managers Index data is the UK’s economic data highlight this week.

EUR

• EURUSD was a beneficiary of the jumbo 0.5% US interest rate cut last week.

• Investors have questions over the formation of a French government - How long will it last and will it tackle the budget deficit?

• Can the Single currency follow the pound and make a new 2024 high this week against the dollar?

USD

• The US Federal Reserve said that they are ‘strongly committed to supporting maximum employment’.

• This comment followed a ‘jumbo’ 0.5% rate cut last week, encouraging investors to sell the US dollar yet again.

• The US economy powers on. Will Flash manufacturing and services PMI data outperform the UK and Eurozone again?

Main events for this week:

Mon Sep 23 09:00 EUR Flash Manufacturing & Services PMI 09:30 GBP Flash Manufacturing & Services PMI 14:45 USD Flash Manufacturing & Services PMI 15:15 USD FOMC Goolsbee Speaks 18:00 USD FOMC Kashkari Speaks Tue Sep 24 05:30 AUD Cash Rate/Statement 06:30 AUD RBA Press Conference 09:00 EUR German IFO Business Climate 15:00 USD Consumer Confidence 18:10 CAD BoC Gov Macklem Speaks Wed Sep 25 02:30 AUD CPI 06:00 JPY BoJ Core CPI 09:00 GBP MPC Greene Speaks Thu Sep 26 08:30 CHF Swiss National Bank Interest Rate Decision 13:30 USD Final GDP/Unemployment Claims/Durable Goods 14:10 USD FOMC Collins Speaks 14:30 EUR ECB President Lagarde Speaks 18:00 USD FOMC Kashkari Speaks Fri Sep 27 00:30 JPY Tokyo Core CPI 13:30 CAD GDP 13:30 USD Core Personal Consumption Expenditure 15:00 USD Revised UoM Consumer Sentiment