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Home > Market Watch > EU & UK News > Wed February 21, 2024

Daily Insights
February 21, 2024

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  • The US Dollar continues to edge lower as traders wait for the Federal Reserve’s last meeting minutes for any guidance on the timing of potential interest rate cuts. It’s been a frustrating start of the week for greenback bulls as the US Dollar should be higher following last week’s data but it’s not – the DXY (US Dollar Index) dipped yesterday to touch 103.80 and we’re currently hovering the 104 handle.
  • The Fed last met at the Jan 30-31 meeting where Chair Jerome Powell stated that a March cut was unlikely. Following the data we had the past couple of weeks, the market has completely erased a chance a of 25 basis point rate cut in the upcoming meeting.

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  • The Euro has advanced well since yesterday, rising from 1.0760 all the way to trade above 1.08 today as market reprices the ECB interest rate outlook. Overnight Indexed swaps only see a reduced chance of 3% to cut in March, and a 42% probability for the April meeting. The fully priced-in rate cut is now estimated to be in June.

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  • On EUR/GBP we rose to a one-month high after BOE’s Governor Andrew Bailey dovishness stated that policymakers don’t have to wait for inflation to hit the 2% goal to start cutting interest rates. The pair rose as much as 0.2% to trade at 0.8574, the highest since Jan. 22.
  • Cable currently trades at 1.2627, and we have been stuck in the 1.25-1.27 range for a while now. We have a broad range of PMIs tomorrow to look forward to, but I doubt we see major moves on this release.

Economic Calendar

21 Feb 2024
:
AUD - Wage Price Index q/q
:
GBP - Public Sector Net Borrowing
:
CNY - Foreign Direct Investment ytd/y
:
EUR - German 10-y Bond Auction
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GBP - CBI Industrial Order Expectations
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USD - FOMC Member Bostic Speaks
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CAD - NHPI m/m
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GBP - MPC Member Dhingra Speaks
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USD - FOMC Member Barkin Speaks
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EUR - Consumer Confidence
:
USD - FOMC Member Bowman Speaks
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USD - FOMC Meeting Minutes
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NZD - Trade Balance
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AUD - Flash Manufacturing PMI
:
AUD - Flash Services PMI

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85663 0.85587
gbp/usd 1.26373 1.26181
gbp/aud 1.92721 1.92221
gbp/nzd 2.04714 2.03851
usd/jpy 150.103 149.849
eur/usd 1.0819 1.08054
gbp/jpy 189.521 189.279
eur/cnh 7.78954 7.7646
usd/cnh 7.20692 7.18031
Equities and Commodities
Nasdaq 100 17509.2
DOW 38546.5
S&P 500 4974.91
BRENT CRUDE 82.54
WTI 77.25
GOLD 2030.02

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Francisco Mioludo

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Francisco Mioludo is a trader for GPS Capital Markets at the London office. Before joining GPS, Francisco worked in Market Risk at a commodity trading firm in London where he gained valuable skills for his current role. Francisco looks after our EU and UK sales team with everything from analysis to structuring and pricing.

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