Marketwatch EU & UK

Daily Insights
September 21, 2023

As widely expected, the FOMC left its benchmark interest rate unchanged last night whilst signaling that rates will likely stay higher for longer, and rate setters left the door open for one more hike this year. Officials repeated recent language in the accompanying statement saying that they will determine the “extent of additional policy firming that may be appropriate.” The committee held its target range at 5.25% to 5.5% with Chairman Powell reiterating the message saying officials are “prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective.” The committee released updated projections which showed that they expected fewer reductions in interest rates next year than they reported in June. The dot plot now suggests that rates will be at 5.1% by the end of June 24 – up from 4.6% when the projections were last updated in June. After falling a little after the announcement, the US dollar posted gains with the dollar index rallying a little, sending EURUSD as low as 1.0620 and GBPUSD to within a whisker of 1.2300.

All eyes will be on the Bank of England announcement at midday, with the pound trading at its lowest level in five months and hot on the heels of a lower-than-expected CPI print for August. The decision remains a close call after yesterday inflation report which surprised to the downside but the odds of a potentially final 0.25% increase remain high.

The Japanese yen remains under pressure against the US dollar once again trading above 148 with intervention fears growing as the pair approaches 150. Officials last intervened to defend the yen a year ago tomorrow, when the rate to defend against the greenback was 145, and the possibility of intervention a year later cannot be ruled out.

Economic Calendar

AUD - RBA Bulletin
NZD - Credit Card Spending y/y
GBP - Public Sector Net Borrowing
CHF - SNB Monetary Policy Assessment
CHF - SNB Policy Rate
EUR - German Buba President Nagel Speaks
CHF - SNB Press Conference
GBP - Monetary Policy Summary
GBP - MPC Official Bank Rate Votes
GBP - Official Bank Rate
GBP - BOE Inflation Letter
CAD - NHPI m/m
USD - Unemployment Claims
USD - Philly Fed Manufacturing Index
USD - Current Account
EUR - Consumer Confidence
USD - Existing Home Sales
USD - CB Leading Index m/m
EUR - ECB President Lagarde Speaks
USD - Natural Gas Storage
NZD - Westpac Consumer Sentiment
NZD - Trade Balance
AUD - Flash Manufacturing PMI
AUD - Flash Services PMI
GBP - GfK Consumer Confidence
JPY - National Core CPI y/y

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86392 0.86267
gbp/usd 1.23286 1.23042
gbp/aud 1.924 1.91406
gbp/nzd 2.08713 2.07937
usd/jpy 148.19 6
eur/usd 1.06501 1.06168
gbp/jpy 182.943 182.382
eur/cnh 7.78631 7.7605
usd/cnh 7.32137 7.30181
Equities and Commodities
Nasdaq 100 14933.3
DOW 34389.5
S&P 500 4394.78
WTI 88.99
GOLD 1929.37

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.