Marketwatch EU & UK

Daily Insights
September 18, 2023

The US dollar edged lower this morning after capping its first weekly loss since July, as markets look forward to a flurry of central bank policy decisions in the coming days. After dropping late last week, EURUSD is consolidating below 1.07 whilst GBPUSD sits around 1.24 after finding some support at 1.2380.

Recent mixed data in the US points to the FOMC leaving rates on hold when they announce their latest policy decision on Wednesday. Last month’s CPI inflation release showed disinflation progressed in the stickiest categories and recent indicators suggest labor market conditions and consumption are likely to cool further. Markets will pay close attention to the updated dot plot release for clues on whether policy makers favor one final rate hike this year.

The Bank of England meet this week, with the MPC expected to deliver another rate increase on Thursday, with markets pricing in a 0.25% hike, taking the benchmark rate to 5.5%. Wednesday sees the release of the August CPI print which is expected to come in at 7.2% from the previous 6.8%. Fuel prices continue to keep inflation elevated; however, October should bring some respite, with a drop expected, as the rise in household energy bills at the same point last year drops out of the annual calculation.

This week also sees the release of the final euro area CPI release which is expected to come in unchanged at 5.3%. A recent fall in inflation was not enough to stop the ECB from raising interest rates last week, but many in the market now believe that the central bank will now be on hold. Euro area flash PMIs are released on Friday and investors will look for further insight into the downside risks to the economic outlook and whether the region will be heading for a hard landing.

Have a good week.

Economic Calendar

JPY - Bank Holiday
EUR - German Buba Monthly Report
CAD - Housing Starts
CAD - IPPI m/m
CAD - RMPI m/m
USD - NAHB Housing Market Index
USD - TIC Long-Term Purchases

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86099 0.85901
gbp/usd 1.24045 1.23684
gbp/aud 1.92727 1.91703
gbp/nzd 2.1007 2.08699
usd/jpy 147.877 147.557
eur/usd 1.06776 1.06549
gbp/jpy 183.34 182.641
eur/cnh 7.7779 7.7531
usd/cnh 7.29312 7.26779
Equities and Commodities
Nasdaq 100 15245.8
DOW 34690.8
S&P 500 4463.77
WTI 91.66
GOLD 1929.54

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 Simon Walker


Simon Walker is head of the GPS Capital Markets trade desk in our London office where he is responsible for covering market risk in European hours. He has over 25 years’ experience in foreign exchange, working in both sales and trading.