UK: Weekly FX Market Update 27 April

GBP

• Last week’s PMI data & retail sales showed a positively performing UK economy, despite the many political and geopolitical issues. How long can this continue?

• The Bank of England sets interest rates on Thursday. The last month has seen rate expectations for 2026 move from two cuts to four hikes, then back to holding rates steady & now two hikes. What next?

• Will the Iran war drag on, forcing investors to consider buying safe-haven US$’s again & pushing GBPUSD back towards 1.3000?

EUR

• Eurozone PMI data last week pointed to an expected slowdown, with Germany downgrading its GDP forecasts from 1% to 0.5% for 2026. Will this negative sentiment weigh upon the Euro?

• The European Central Bank (ECB) sets rates on Thursday. Bloomberg analysts don’t expect a rate hike this week, but will ECB president Lagarde prepare the market for a hike in June?

• Eurozone CPI is released on Thursday morning. Could it force the ECB’s hand into a hawkish hold?

USD

• The Iran war appears to have settled into an uneasy period, with the Straits of Hormuz shut to all shipping. Global oil prices remain above $100 & are pushing inflation higher, while Iran is starved of oil revenue.

• The Federal Reserve sets rates on Thursday, with BBG analysts expecting a hold. Will Fed Chair Powell continue to allude to a rate cut for 2026?

• US advance GDP is released on Friday. Just how much is the US economy being slowed by the Iran war?

• As Senator Tillis drops his opposition to Fed designate Warsh, the path is clear for new Fed behaviour. Will we have lower rates & a cosy relationship with the US Treasury?

Mon Apr 27

11:00 GBP CBI Realized sales

Tue Apr 28

05:30 JPY Bank of Japan (BoJ) Interest Rate Decision/Statement/Outlook

06:00 JPY BoJ Press Conference

15:00 USD Consumer Confidence

Wed Apr 29

02:30 AUD CPI

07:00 EUR German Prelim CPI

13:30 USD Durable Goods/Goods Trade Balance

14:45 CAD Bank of Canada (BoC) Interest Rate Decision

15:30 CAD BoC Press Conference

19:00 USD FOMC Interest Rate Decision/Statement

19:30 USD FOMC Press Conference

Thu Apr 30

09:00 German Prelim GDP

10:00 EUR CPI Flash Estimate/Flash GDP/Unemployment

12:00 GBP Bank of England (BoE) Interest Rate Decision/Monetary Policy Report

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

13:30 CAD GDP

13:30 USD Advance GDP/Core PCE Index/Unemployment Claims

13:45 EUR ECB Press Conference

Fri May 1

12:15 GBP MPC Pill Speaks

15:00 USD ISM Manufacturing PMI