UK: Weekly FX Market Update 22 June

GBP

• Sterling swoons as CPI softens, the oil price plummets, the Fed takes a hawkish turn & Prime Minister Starmer resigns.

• The Bank of England holds rates steady at 3.75% after May CPI is weaker than expected.

• With Starmer resigning & Burnham feasibly becoming the next PM, will investors keep calm & carry on or start to hedge UK assets, possibly driving sterling lower across the board?

EUR

• The Euro was under pressure last week, even as the Iran war looked like coming to an end.

• ECB Economist Lane said the Eurozone economy was doing ‘alright’.

• Will Flash Purchasing Managers Index give the Euro direction this week?

USD

• Trump signs a memorandum of understanding to start 60 days of peace talks with Iran, but Israel attacks Hezbollah in Lebanon, & Iran closes the Staits of Hormuz again. Iran then hails ‘progress’ to end the Lebanon war.

• Republicans condemn the already signed Memorandum of Understanding with the US possibly being a guarantor of a $300 billion fund for Iran.

• Fed Chair Warsh shows his colours by stressing price stability, encouraging Bloomberg analysts to price in a US rate hike by October.

• Will Core Personal Consumption Expenditure remain elevated & keep the US Dollar buoyant?

Mon Jun 22

13:30 CAD CPI

13:30 EUR ECB President Lagarde Speaks

Tue Jun 23

09:00 EUR Flash Manufacturing & Services PMI

09:30 GBP Flash Manufacturing & Services PMI

14:00 CAD BoC Gov Macklem Speaks

14:45 USD Flash Manufacturing & Services PMI

Wed Jun 24

02:30 AUD CPI

09:00 EUR German IFO Business Climate

Thu Jun 25

02:30 AUD Employment Data

13:30 USD Core PCE Price Index/Final GDP/Durable Goods

Fri Jun 26

00:30 JPY Tokyo Core CPI

15:00 USD Revised UoM Consumer Sentiment & Inflation Expectations