UK: Weekly FX Market Update 12 February

CalendarFebruary 12, 2024
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GBP
  • Last week, the focus was on the USD and its continued strengthening, however, this week could be ‘Sterling dominant’.

  • The week kicks off with Bank of England (BoE) Governor Bailey speaking today.

  • This is then followed by UK Employment data on Tuesday, UK CPI on Wednesday, UK GDP on Thursday and UK Retail Sales is released on Friday.

  • 10 days ago, the BoE told the markets to expect inflation to be higher in January than it was in December. Just how much higher will that be and will average earnings remain high also?

  • Will the UK GDP number highlight a resilient economy, or will this be another anaemic reading, weakening the pound?

EUR
  • The single currency also had to resist the US dollar, weakening over the course of the week.

  • This was despite hawkish comments from ECB’s Holzmann, who said that rate cuts this year were not guaranteed.

  • ECB’s Kazaks added some balance to the narrative, saying that he is not optimistic that rate cuts would be in March or April, continuing that ‘Summer could be that moment’.

  • Can ZEW economic sentiment and Flash GDP bring some cheer to the euro?

USD
  • The positive sentiment generated by US Jobs data on 2nd February continued last week, with the US dollar continuing to dominate.

  • Richmond Fed President Barkin also helped the Greenback with his hawkish comments that he wanted to see ‘sustained broadening disinflation before cuts’.

  • This week, US CPI is released on Tuesday, with Retail Sales out on Thursday, and then Consumer Sentiment and the Producer Price Index both announced on Friday.

  • Will the US economy continue to show strength, and will inflation decline from last month’s 3.4% reading?


Main events for this week:

Mon Feb 12

All Day Eurogroup Meetings

18:00 GBP BoE Bailey Speaks

Tue Feb 13

02:00 NZD Inflation Expectations

07:00 GBP Claimant Count Change/Average Earnings/Unemployment Rate

07:30 CHF CPI

10:00 EUR ZEW Economic Sentiment

13:30 USD CPI/Core CPI

Wed Feb 14

07:00 GBP CPI/Core CPI

10:00 EUR Flash GDP/Industrial Production

Thu Feb 15

00:30 AUD Employment Data

07:00 GBP GDP/Goods Trade Balance/Industrial Production/Manufacturing Production.

13:00 GBP MPC Greene Speaks

13:30 USD Retail Sales/Empire State Manufacturing Index/Unemployment Claims.

13:50 GBP MPC Mann Speaks

14:15 USD Industrial Production

Fri Feb 16

07:00 GBP Retail Sales

13:30 USD Producer price Index

15:00 USD Preliminary UoM Consumer Sentiment/Inflation Expectations

Author

Trevor Charsley

Trevor Charsley

Senior Market Strategist

Trevor has over 25 years' trading and sales experience. He produces regular market and technical analysis as well as help with the structure and management of FX hedging policies. Trevor is often listed among the top "currency forecaster on Bloomberg".

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