UK: Weekly FX Market Update 14 October 2024
GBP
In a week where UK GDP was a meagre 0.2%, and with US CPI higher than expected, GBPUSD came under pressure again.
Can UK average earnings on Tuesday and UK CPI on Wednesday help to support the pound, which has fallen almost 3% against the dollar in the last 2 weeks?
Turning to GBPEUR, Bloomberg analysts suggest that the European Central Bank will cut rates by 1.5%, and the Bank of England by 1% by year end. With this in mind, can GBPEUR continue to strengthen?
EUR
With Eurozone inflation below 2%, and Germany forecasting a GDP contraction of 0.2% this year, will investors turn bearish and ‘punish’ the Euro?
Will France’s new Government be successful in having a budget passed?
Investors are expecting the ECB to cut rates this Thursday, and then at every meeting until March. Will ECB President Lagarde’s press conference support that forecast?
USD
Annual US CPI was expected to decline from 2.5% to 2.3% in August. It only declined to 2.4%, encouraging investors to buy US Dollars.
When asked about interest rate cuts, Chicago Fed president said that the Fed has the ‘ability to be patient and wait’, opening the door to holding interest rates steady in November.
US retail sales are released on Thursday.
When will the market start to factor in its thoughts on the US November 5th
election? And what will the impact be on the dollar?
Main events for this week:
Mon Oct 14
07:30 GBP MPC Dhingra Speaks
20:00 USD FOMC Waller Speaks
Tues Oct 15
07:00 GBP Claimant Count Change/Average earnings Index
10:00 EUR German ZEW Economic Sentiment
13:30 CAD CPI
13:30 USD Empire State Manufacturing Index
16:30 USD FOMC Daly Speaks
22:45 NZD CPI
Wed Oct 16
07:00 GBP CPI
Thu Oct 17
01:30 AUD Employment Data
13:15 EUR ECB Interest Rate Decision/Statement
13:30 USD Retail Sales/Unemployment Claims
13:45 EUR ECB Press Conference
15:00 GBP Monetary Policy Report Hearings
Fri Oct 18
07:00 GBP Retail Sales
13:30 USD Building Permits
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