UK: Weekly FX Market Update 16 March

GBP

• UK GDP was released last week, again showing a weak UK economy. With the potential inflationary oil shock, is stagflation looming for the UK?

• Four weeks ago, Bloomberg analysts gave an 85% chance of a UK rate cut this week, however, due to the impact of the Iran war and possible surge in inflation, a UK rate cut is no longer expected this year.

• Data released this Thursday morning will show how the UK jobs market has been performing, followed by the BoE interest rate decision.

EUR

• Being an importer of hydrocarbons, as the oil price jumps higher, the Euro comes under pressure.

• The European Central Bank (ECB) says it will not make a hasty decision to change monetary policy.

• What will the ECB say about investors now expecting a rate hike from them by September?

USD

• With the US the largest oil producer in the World, as the oil price jumps above US$ 100 per barrel, the US$ strengthens against its peers.

• Trump says the Iran war will end ‘very soon’. Iran says that a ceasefire will only take place if Israel and the US agree not to attack it again.

• Meanwhile, with inflation set to rise and the US spending US$ 1 billion a day on the war, the polls turn even more negative for the president.

• What will the Federal Reserve say about interest rates on Wednesday? Could a longer-term ‘hold’ be on the cards, and will that strengthen the Dollar further?

Mon Mar 16

12:30 CAD CPI

13:15 USD Industrial Production/capacity Utilization

Tue Mar 17

03:30 AUD Reserve Bank of Australia Interest Rate Decision

10:00 EUR German ZEW Economic Sentiment

Wed Mar 18

10:00 EUR Final CPI

12:30 USD Producer Price Index

13:45 CAD Bank of Canada (BoC) Interest Rate Decision

14:30 CAD BoC Press Conference

18:00 USD Federal Reserve Interest Rate Decision/Economic Projections/Statement

18:30 USD FOMC Press Conference

Thu Mar 19

00:30 AUD Employment Data

05:00 JPY Bank of Japan Interest Rate Decision/Press Conference

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

08:30 CHF Swiss National Bank (SNB) Interest Rate Decision

09:00 CHF SNB Press Conference

12:00 GBP Bank of England Interest Rate Decision/Monetary Policy Summary

12:30 USD Unemployment Claims

13:15 EUR European Central Bank (ECB) Interest Rate Decision/Statement

13:45 EUR ECB Press Conference

Fri Mar 20

All Day JPY Bank Holiday

07:00 GBP Public Sector Net Borrowing

09:00 EUR Current Account

12:30 CAD Retail Sales