UK: Weekly FX Market Update 11 May

GBP

• The government received a drubbing in the by-elections. Prime Minister Starmer says the results ‘don’t weaken my resolve’ and gives another ‘reset’ speech on Monday.

• Will there be a leadership challenge to PM Starmer? If there is, will investors sell sterling on fears of more monetary policy easing?

• Can UK GDP on Thursday show an acceleration in the UK economy and strengthen the Pound?

EUR

• Will Eurozone GDP also pick up this week?

• The FT reports that investors are purchasing more German government bonds, which may support the Euro.

• Are Ukraine and Russia edging towards a peace deal?

USD

• As the US rejects Iranian peace proposals, are markets waiting for the secondary effects of the blockade of the Straits of Hormuz to hit the economy?

• What will US CPI show on Tuesday? A spike in oil prices could encourage investors to buy US dollars.

• US Treasury Secretary Bessent visits Japan this week. Could the yen strengthen at the same time?

Mon May 11

15:00 USD Existing Home Sales

Tue May 12

00:01 GBP BRC Retail Sales Monitor

10:00 EUR German ZEW Economic Sentiment

13:30 USD CPI

18:00 USD FOMC Goolsbee Speaks

Wed May 13

10:00 EUR Flash GDP/Industrial Production/Flash Employment Change

13:30 USD PPI

16:30 USD FOMC Collins Speaks

Thu May 14

07:00 GBP GDP/Prelim GDP/Goods Trade Balance/Industrial Production

13:30 USD Retail Sales

16:15 GBP MPC Pill Speaks

Fri May 15

09:00 EUR Economic Bulletin

13:30 USD Fed Chair Nomination Vote

14:15 USD Capacity Utilization/Industrial Production