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UK: Weekly FX Market Update 17 April

CalendarApril 17, 2023
  • GBPUSD made a new high for 2023 despite UK GDP flatlining in March.

  • The main driver for this move higher was dollar weakness, caused by falling US inflation.

  • UK Employment data is released on Tuesday and UK CPI is released on Wednesday. Retail Sales are due out on Friday.

  • Can the UK economy continue to perform better than the IMF’s forecast of a 0.3% contraction for 2023?

  • EURUSD also made a new high for 2023 last week.

  • Eurozone Current Account and Final CPI is released on Wednesday.

  • ECB Board Member Holzmann said that the Eurozone inflation outlook alone warrants a 0.5% rate hike on May 4th.

  • Will this hawkishness continue to support the Euro?

  • Headline US CPI dropped a full percentage point in March from 6% to 5%, disappointing the market and causing the USD sell off.

  • Producer prices index also had its largest drop since the pandemic, falling by 0.5%.

  • This week, US regional banks release their earnings reports, the first release since the collapse of SVB.

With the collapse of SVB just a month ago, the release of the bank earnings reports carries greater significance than previous. Will the reports allude to weakness in this important sector of the US economy? If it does, will we see another bout of US Dollar weakness?

With the fall in US inflation, have we seen the peak of the FOMC’s hiking cycle? If so, is the USD set for a period of weakness against its major peers? Or could this be short-lived, with the BoE and ECB soon to follow suit as global inflation drops and interest rate cuts become the talking point for the second half of 2023?

Events for the week ahead:

Mon Apr 17

13:30 USD Empire State Manufacturing Index

15:00 GBP MPC Cunliffe Speaks

Tue Apr 18

03:00 CNY GDP

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

10:00 EUR ZEW Economic Sentiment/Trade Balance

13:30 CAD CPI

Wed Apr 19

07:00 GBP CPI

09:00 EUR Current Account

10:00 EUR Final CPI

17:30 MPC Mann Speaks

Thu Apr 20

13:45 USD FOMC Waller Speaks

15:00 EUR Consumer Confidence

Fri Apr 21

07:00 GBP Retail Sales

09:00 EUR Flash Manufacturing & Services PMI

09:30 GBP Flash Manufacturing & Services PMI

14:45 USD Flash Manufacturing & Services PMI


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".