The dollar index slipped 0.1%, reversing from its rally last week, while the euro rose 0.1% against the greenback to $1.0978. The British pound gained 0.2% against the dollar, standing at $1.2764. While the Japanese yen has slumped following weak Japanese wage data, the currency held steady against the dollar, which fell 0.25% to 145.39 yen.

According to future markets, investors are expecting a total of 140 basis points in rate cuts this year, pricing a two-thirds chance that they will begin in March. Still, some experts believe that markets may be getting ahead of themselves. “In our view, investors are still too optimistically positioned for Fed rate cuts,” Rabobank senior FX strategist Jane Foley commented in a note to investors.

The post Dollar Retreats as Investors Anticipate Rate Cuts appeared first on theprimarymarket.com.

In contrast, the sterling was down against the euro, which edged 0.22% higher to 86.95 pence. Still, this wasn’t enough to push the British currency off track from rising 3% against the euro for the year. The pound’s rise against other major currencies this year is largely driven by the Bank of England’s tight fiscal policy in an effort to curb inflation.

Currently, investors are betting that the Bank of England (BoE) will take longer to lower interest rates than its counterparts at the US Federal Reserve and the European Central Bank (ECB). Traders expect the BoE to implement a combined 140 basis points of rate cuts in 2024; lower than an expected 160 basis points from the ECB and 150 from the Fed.

The post British Pound on Course for 5% Gain in 2023 appeared first on theprimarymarket.com.

News of the currency’s stumble comes ahead of the Bank of England’s policy meeting next week. Markets are expecting the central bank to hold rates constant. According to future markets, the BoE’s first rate cut is expected in June, while the European Central Bank and Federal Reserve are expected to implement rate cuts as soon as March.

“Whilst a lot of the weak structural backdrop is known, the key negative for sterling over 2024 is the potential for the markets to price in earlier rate cuts,” Gareth Gettinby, an investment manager with Aegon Asset Management, remarked, suggesting that the sterling’s strength will be largely affected by interest rates.

The post Sterling Tanks Ahead of Bank of England Policy Meeting appeared first on theprimarymarket.com.

Markets are expecting the Fed to hold its interest rates steady at around 5.25%; their highest level over the past 22 years. Money markets are expecting the same from the BoE, pricing a 92% chance that its interest will go unchanged.

“Since the last MPR (monetary policy rate) in August, the data has largely supported the decision to hold, pointing to a loosening in the labour market (from what we can tell), slowdown in economic activity and easing inflation,” RCB economists said of the current financial situation.

The post Dollar Rises Against Sterling Ahead of Fed Decision appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Excluding bonuses, British wages grew by 7.8% in the three months to July when compared to the previous year, figures from the Office for National Statistics on Tuesday showed. This matches the record pace reached in June and falls in line with analysts’ expectations. When including bonuses, wages grew 8.5%, exceeding the 8.4% growth the previous month.

Wage growth continued despite an uptick in unemployment, from 4.2% in June to 4.3% in July. Ashley Webb, UK economist at consultancy Capital Economics explained that while the labor market eased in July, wage growth “will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25% currently to a peak of 5.50%, next week.”

The post Sterling Remains Steady Following Strong UK Wage Data appeared first on theprimarymarket.com.

Such developments have strengthened bets that the Bank of England is set to implement a 25 basis point interest rate hike later this month. The central bank has implemented 14 straight rate hikes, bringing its key rate to 5.25%.

The pound declined by 0.5% against the US dollar to $1.2565; a slight rise from the $1.2529 realized earlier in the day. The latter figure is the pound’s weakest showing since June 13. The dollar index, which measures the greenback against six other currencies including the pound, rose 0.4% to 104.61.

The post Pound Slumps to 12-Week Low Amid Falling Business Activity appeared first on theprimarymarket.com.

Against the greenback, the British pound climbed 0.3% to $1.2736, putting the sterling on track to achieving its largest one-day rise since August 7. The currency also strengthened by 0.1% against the euro, with one euro buying 85.75 pence.

Consumer price inflation in July slowed by 6.8%, however, core inflation, which excludes volatile expenses such as food and energy, remained flat at 6.9% compared to June. Services inflation rose from 7.2% in June to 7.4% in July.

Oliver Blackbourn, Multi-Asset Portfolio Manager at Janus Henderson Investors, explained that stubbornly high core inflation is putting pressure on the Bank of England to extend its interest rate hiking agenda. Blackbourn commented that the BoE “will want to see this less volatile measure decline to suggest that cost pressures are sustainably returning to target.”

The post Pound Rises Following Release of UK Inflation Data appeared first on theprimarymarket.com.

Against the U.S. dollar, the pound fell 0.2% to $1.2688; just shy of its one-month low of $1.2680. The FTSE 100 index slumped by 1.46% to a two-week low as well as a third consecutive day of losses.

Markets are largely betting on the Bank of England raising interest rates from 5% to a 15-year high of 5.25%. Still, markets are attributing a 40% probability to the central bank raising interest rates by a half-point as it did in June.

Another concern among investors is Fitch’s recent decision to downgrade the U.S. economy, thereby causing global share markets to decline.

Given that markets expect a 50 basis point interest rate hike, Lee Hardman, senior currency strategist at MUFG, observed that a 25 basis point hike would likely weaken the pound further.

The post Pounds Heads for One-Month Low Ahead of BoE Decision appeared first on theprimarymarket.com.

The British pound remained flat against the U.S. dollar at $1.2782 after slumping to a three-week low on Tuesday. The pound rose 0.1% against the euro to 85.89 pence after hitting a one-week low on Tuesday night.

Investors are largely expecting the Bank of England to hike interest rates again, thereby extending its streak to 14 consecutive hikes. The UK central bank instituted a 50 basis point hike in June.

Markets believe that there is a 63% chance of a 25 basis point hike on Thursday, which would see the BoE interest rate hit a 15-year high of 5.25%. A 37% probability has been given for another 50 basis point rise.

The post Pound Holds Steady as Bets Roll in for Bank of England Decision appeared first on theprimarymarket.com.

The dollar index slipped 0.1%, reversing from its rally last week, while the euro rose 0.1% against the greenback to $1.0978. The British pound gained 0.2% against the dollar, standing at $1.2764. While the Japanese yen has slumped following weak Japanese wage data, the currency held steady against the dollar, which fell 0.25% to 145.39 yen.

According to future markets, investors are expecting a total of 140 basis points in rate cuts this year, pricing a two-thirds chance that they will begin in March. Still, some experts believe that markets may be getting ahead of themselves. “In our view, investors are still too optimistically positioned for Fed rate cuts,” Rabobank senior FX strategist Jane Foley commented in a note to investors.

The post Dollar Retreats as Investors Anticipate Rate Cuts appeared first on theprimarymarket.com.

In contrast, the sterling was down against the euro, which edged 0.22% higher to 86.95 pence. Still, this wasn’t enough to push the British currency off track from rising 3% against the euro for the year. The pound’s rise against other major currencies this year is largely driven by the Bank of England’s tight fiscal policy in an effort to curb inflation.

Currently, investors are betting that the Bank of England (BoE) will take longer to lower interest rates than its counterparts at the US Federal Reserve and the European Central Bank (ECB). Traders expect the BoE to implement a combined 140 basis points of rate cuts in 2024; lower than an expected 160 basis points from the ECB and 150 from the Fed.

The post British Pound on Course for 5% Gain in 2023 appeared first on theprimarymarket.com.

News of the currency’s stumble comes ahead of the Bank of England’s policy meeting next week. Markets are expecting the central bank to hold rates constant. According to future markets, the BoE’s first rate cut is expected in June, while the European Central Bank and Federal Reserve are expected to implement rate cuts as soon as March.

“Whilst a lot of the weak structural backdrop is known, the key negative for sterling over 2024 is the potential for the markets to price in earlier rate cuts,” Gareth Gettinby, an investment manager with Aegon Asset Management, remarked, suggesting that the sterling’s strength will be largely affected by interest rates.

The post Sterling Tanks Ahead of Bank of England Policy Meeting appeared first on theprimarymarket.com.

Markets are expecting the Fed to hold its interest rates steady at around 5.25%; their highest level over the past 22 years. Money markets are expecting the same from the BoE, pricing a 92% chance that its interest will go unchanged.

“Since the last MPR (monetary policy rate) in August, the data has largely supported the decision to hold, pointing to a loosening in the labour market (from what we can tell), slowdown in economic activity and easing inflation,” RCB economists said of the current financial situation.

The post Dollar Rises Against Sterling Ahead of Fed Decision appeared first on theprimarymarket.com.

Goldman Sachs, Deutsche Bank, and Nomura all believe that the Bank of England will hold rates steady, backtracking from previous expectations of a September hike. Chris Turner, head of markets at ING, disagreed, claiming that a hike of 25 basis points is still likely, claiming that “a hike would provide GBP/USD with some much-needed support.” 

The sterling fell by 0.28% against the US dollar to $1.2309. Meanwhile, the euro strengthened against the British pound by 0.23%, reaching 86.55 pence.

The post Sterling Staggers Ahead of Bank of England Policy Decision appeared first on theprimarymarket.com.

Excluding bonuses, British wages grew by 7.8% in the three months to July when compared to the previous year, figures from the Office for National Statistics on Tuesday showed. This matches the record pace reached in June and falls in line with analysts’ expectations. When including bonuses, wages grew 8.5%, exceeding the 8.4% growth the previous month.

Wage growth continued despite an uptick in unemployment, from 4.2% in June to 4.3% in July. Ashley Webb, UK economist at consultancy Capital Economics explained that while the labor market eased in July, wage growth “will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25% currently to a peak of 5.50%, next week.”

The post Sterling Remains Steady Following Strong UK Wage Data appeared first on theprimarymarket.com.

Such developments have strengthened bets that the Bank of England is set to implement a 25 basis point interest rate hike later this month. The central bank has implemented 14 straight rate hikes, bringing its key rate to 5.25%.

The pound declined by 0.5% against the US dollar to $1.2565; a slight rise from the $1.2529 realized earlier in the day. The latter figure is the pound’s weakest showing since June 13. The dollar index, which measures the greenback against six other currencies including the pound, rose 0.4% to 104.61.

The post Pound Slumps to 12-Week Low Amid Falling Business Activity appeared first on theprimarymarket.com.

Against the greenback, the British pound climbed 0.3% to $1.2736, putting the sterling on track to achieving its largest one-day rise since August 7. The currency also strengthened by 0.1% against the euro, with one euro buying 85.75 pence.

Consumer price inflation in July slowed by 6.8%, however, core inflation, which excludes volatile expenses such as food and energy, remained flat at 6.9% compared to June. Services inflation rose from 7.2% in June to 7.4% in July.

Oliver Blackbourn, Multi-Asset Portfolio Manager at Janus Henderson Investors, explained that stubbornly high core inflation is putting pressure on the Bank of England to extend its interest rate hiking agenda. Blackbourn commented that the BoE “will want to see this less volatile measure decline to suggest that cost pressures are sustainably returning to target.”

The post Pound Rises Following Release of UK Inflation Data appeared first on theprimarymarket.com.

Against the U.S. dollar, the pound fell 0.2% to $1.2688; just shy of its one-month low of $1.2680. The FTSE 100 index slumped by 1.46% to a two-week low as well as a third consecutive day of losses.

Markets are largely betting on the Bank of England raising interest rates from 5% to a 15-year high of 5.25%. Still, markets are attributing a 40% probability to the central bank raising interest rates by a half-point as it did in June.

Another concern among investors is Fitch’s recent decision to downgrade the U.S. economy, thereby causing global share markets to decline.

Given that markets expect a 50 basis point interest rate hike, Lee Hardman, senior currency strategist at MUFG, observed that a 25 basis point hike would likely weaken the pound further.

The post Pounds Heads for One-Month Low Ahead of BoE Decision appeared first on theprimarymarket.com.

The British pound remained flat against the U.S. dollar at $1.2782 after slumping to a three-week low on Tuesday. The pound rose 0.1% against the euro to 85.89 pence after hitting a one-week low on Tuesday night.

Investors are largely expecting the Bank of England to hike interest rates again, thereby extending its streak to 14 consecutive hikes. The UK central bank instituted a 50 basis point hike in June.

Markets believe that there is a 63% chance of a 25 basis point hike on Thursday, which would see the BoE interest rate hit a 15-year high of 5.25%. A 37% probability has been given for another 50 basis point rise.

The post Pound Holds Steady as Bets Roll in for Bank of England Decision appeared first on theprimarymarket.com.