Currency Insights

RBA sees inflation moderating but is not ready to cut the base rate

The Reserve Bank of Australia did exactly as the markets had predicted and left their base rate at 4.35% when they met in the early hours of this morning (UK time). The accompanying statement does confirm that they are happier now that inflation appears to be moderating but, at 3.4%, annual CPI is still well above their 2% target.

Sterling steady as UK growth confirmed

Blogs

Seeing the UK return to growth, albeit modest, has steadied the Pound but not given it any kind of filip. Sadly, this morning’s RICS house price balance hasn’t made any real change to that situation.

UK GDP matches forecast

Blogs

We haven't seen any growth in the UK economy since September 2023 this morning's data shows another contraction of 0.1% in the month of February. This was entirely in line with market forecasts, so the value of the pound was largely unaffected.

USD slips ahead of jobs report

Blogs

As last Friday was the 1st of the month, The US employment report is scheduled to be released this afternoon, the second Friday of the month. The markets are expecting a drop in the number of fresh jobs created in February to around 200,000 and a slowdown in the rise in average hourly earnings to around 4.4% on the year.

Hands holding British pound coin and small money pouch, symbolising the benefits of returning to the UK

UK Budget – no surprises

Blogs

There were no major surprises in the UK budget yesterday. Chancellor of the exchequer, Jeremy Hunt, delivered on a number of items that had already been leaked in advance and, when questioned, didn't rule out the possibility of a general election in May.

AUD rebounds after ‘as expected’ GDP

Blogs

The Australian economy grew by 1.5% in the year to December. That is down from 2.1% in the year to September but slightly above the market forecasts. In addition, Aussie retail sales grew by 1.1% in the month of February

UK retail sales slow in February – rainy days blamed

Blogs

Sterling had the shine taken off it this morning when data from the British Retail Consortium showed just 1% growth in the year to February. That was down from 1.4% in the previous month. The BRC blamed rubbish weather in February which kept shoppers away from the high streets.

USD slides ahead of Fed Chair’s testimony

Blogs

Friday’s US employment data was very much in line with expectations although the pace of average wage price rises slowed slightly. That appears to be all the incentive the markets needed to sell some US dollars, although the GBP/USD rate is still within recent ranges at $1.2665 and the EUR/USD is similarly rangebound at $1.0840.

Dovish sentiment from RBNZ allows GBP gains

Blogs

A mixed week for the pound this week, with a lack of sterling data to drive any momentum. Therefore, the pound has been reactive to events in its competitor currencies.

panorama view cityscape tower in Bangkok

US to impose further sanctions on Russia and its supporters

Blogs

Meanwhile, news overnight from the US, is that they will impose sanctions on over 500 targets on Friday in action marking the second anniversary of Russia's invasion of the Ukraine, Deputy US Treasury Secretary Wally Adeyemo told Reuters in an interview on Thursday.

JPY weaker as recession confirmed and BOJ intervention rumoured

Blogs

The GBP/JPY rate is the highest we have seen since 2015 after data was released it showed the Japanese economy as contracted in the last half of 2023 and therefore the economy is technically in recession.

NZD strengthens on PPI and dairy prices

Blogs

New Zealand’s producer price index rose by 0.9% in the last quarter of 2023. That was more than double the market expectations. Add in the 0.5% rise in global dairy prices and there are good reasons for the New Zealand dollar to pick up some buyers.