Markets Unnerved after a volatile week of economic data
Daily Currency Update
Currency markets had a volatile week and this is no surprise as central banks continue to grapple with slowing growth and stubbornly high inflation. Sterling fell heavily against the Euro, Dollar and Yen after UK GDP numbers disappointed and the Bank of England left interest rates unchanged.Key Movers
In the UK, inflationary data has eased slightly. However, GDP data was weaker than expected and as such the Bank of England left interest unchanged this week. We expect Sterling should remain weak through the end of September. The market touched a low of 1.2225 on Thursday.Eurozone bond yields remained firm this week helping the Euro hold its ground vs the Dollar and rose vs Sterling to 0.8675
In the US the Dollar was supported by comments from the Federal Reserve indicating there maybe one more rate hike before year end and that the pace of cuts in 2024 maybe slower than markets expected. This was largely because inflation remains elevated.
Expected Ranges
- GBP/USD: 1.2215 - 1.2350 ▲
- GBP/EUR: 1.1480 - 1.1580 ▲
- GBP/AUD: 1.9040 - 1.9170 ▲
- EUR/USD: 1.0600 - 1.0700 ▲