By Ashley Finill
Last week the pound started off on shaky ground, falling nearly a cent against the Euro ahead of the Bank of England interest rate decision mid-week. When the decision to hold rates was announced, sterling held steady which could have been due to the decision already being priced into the market. BoE governor Andrew Bailey’s comments in a TV interview at the end of the week gave sterling a slight bounce against the Euro as he pushed back on the expectations that the Bank of England would cut interest rates by as early as the third quarter of 2024. Bailey said, “If the market has taken from what we have published this week a view that we are leaning towards more cuts, then I’m afraid I will lean against that, yes,”. Even with key data releases seen last week, GBP/EUR remains locked into a cent trading range, which we have now seen for the past few weeks. As we are only the 2nd working week into the month there are more data releases to come, which may see a breakout from the current trend. UK GDP, retail sales, unemployment and Inflation figures will give an outlook to how the economy is recovering as it continues to battle with the cost of living in the UK and conflicts abroad that continue to disrupt economies and commodities. With the Government’s pledge to half inflation still way off target, they will be hoping to see more of dent in the inflation figure, which is to be released next week on the 15th of November, compared to last months poor reading of 6.7% contracting only 0.1%.
Negative US Data Sees Sterling Soar Against US Dollar
On Friday, Sterling soared against the US Dollar after US non-farm payroll figures came in way below expectations which saw the pound climb over 1.5% on the greenback, this is the best trading day for GBP/USD since March of this year. Take that across the week and GBP/USD is up by nearly 2.5%. This presents a great opportunity for those looking to buy dollars and should you want to take advantage for any future orders then a forward contact may be more attractive for you than it was this time last week. Get in contact with your account manager today for friendly guidance and information on our forward buying option.
Key Data releases this week
Tuesday
3.30am – Australia – RBA interest rate decision
7am – EU – Industrial Production
10am – EU – PPI
15.00-17.00- US Fed Members Waller and Williams Speak
Wednesday
7am – EU – Harmonized Index of Consumer Prices
9:30am – UK – BoE’s Governor Bailey speech
10am – EU – Retail Sales
2pm – US – Fed’s Chair Powell speech
Thursday
7am – EU – EcoFin Meeting
9am – EU – Economic Bulletin
1.30pm – US -initial Jobless Claims
Friday
12am – Australia – RBA Monetary Policy Statement
7am – UK – Gross Domestic Product, Manufacturing, and Industrial Production
10am – EU – European Commission releases Economic Growth Forecasts
3pm – US – Michigan Consumer Sentiment Index