By Grace Smyth
This past week has seen the the UK appoint yet another new Prime Minister. Rishi Sunak enters Number 10 taking on the position of the UK’s third PM in the space of 7 short weeks. Let’s hope his premiership can last longer than the shelf life of a lettuce or perhaps a pumpkin is more in season?
With drastic government change comes market uncertainty, coupled with the scrabbling to halt the damage made by our previous prime ministers mini budget, the Pound was left in a rather vulnerable spot. Thankfully since the appointment of Rishi Sunak it would seem market confidence is on the up, however it is early days and if the last 3 months have taught us anything, it is that we never know what is lurking around the corner to spook investors.
This week attention is on the central banks. The Reserve Bank of Australia is due to release its rate decision on Tuesday, followed by the Federal Reserve mid week on Wednesday and the Bank of England on Thursday and Friday we have Canada’s unemployment rate and US Non Farm Payroll to consider.
Now the havoc of the mini budget, Gilts yields, mortgage markets and changes in government is dealt with, the Bank of England can now turn its focus on managing inflation with rate hikes over the course of the next few months. The last interest rate decision took place on 22 September where the base rate climbed to 2.25 percent from 1.75. On Thursday the Monetary Policy Committee will decide the new base rate. This time around financial markets are pricing in a 0.75 percent rise taking us up to 3 percent, however should the BOE go for a larger hike to 100bps currency rates could react and fluctuate.
Should you have an upcoming transfer to make in the coming days/weeks then do reach out and get in touch with our friendly team for some guidance on how to navigate the currency markets and how to best secure your currency requirements.
The week ahead in more detail:
10:00 EUR GDP and HICP figures
03:30 AUD RBA Interest Rate Decision
14:00 USD ISM Manufacturing PMI
21:45 NZD Employment Change
12:15 USD Employment change
18:00 USD FED Interest Rate Decision
00:30 AUD Trade Balance
12:00 GBP MPC Report and BOE Interest Rate Decision
14:00 USD ISM Services PMI
00:30 AUD RBA Monetary Policy Statement
12:30 USD NonFarm Payroll
12:30 CAD Employment Change and Unemployment Rate