Marketwatch EU & UK

Daily Insights
September 19, 2023

It has been a quiet start to the week ahead of a plethora of central bank policy meetings as the US Federal Reserve kicks off its two-day gathering later today. 10-year US treasury yields made a fresh attempt to breach the year’s high, but weaker than expected US data kept a lid on yields and pushed the dollar index a touch lower. The single currency managed a small rally against the greenback, climbing from support at 1.0660 to test 1.07 after Reuters reported that ECB policymakers are considering raising reserve requirements to tackle excess liquidity. Mixed messages came from ECB officials with Governing Council member Martins Kazaks saying it would be a mistake to bet on rate cuts early next year. However, vice governor of the Bank of Portugal Clara Raposo said that the central bank may see inflation returning to its 2% target sooner than currently forecast.

This morning we await the release of euro area HICP inflation data for August, which is expected to show that underlying price pressures are easing. Core and services inflation have fallen slightly on the month, suggesting a pause in interest rate hikes from the ECB after last week’s 0.25% hike. The headline reading is expected to flatline at 5.3% in August, with the core declining, as analysts forecast a significant drop in September, with inflation falling further from then on.

The pound remains under pressure with GBPUSD trading below 1.24 ahead of the BoE policy meeting later this week. The pound is softer against both the euro and the US dollar and a test of the May low of 1.2308 in cable cannot be ruled with rallies becoming harder as the MPC gets ever closer to the end of its interest rate hiking cycle.

Economic Calendar

AUD - Monetary Policy Meeting Minutes
CHF - Trade Balance
CNY - Foreign Direct Investment ytd/y
EUR - Current Account
EUR - Final Core CPI y/y
EUR - Final CPI y/y
GBP - 30-y Bond Auction
CAD - CPI m/m
CAD - Median CPI y/y
CAD - Trimmed CPI y/y
CAD - Common CPI y/y
CAD - Core CPI m/m
USD - Building Permits
USD - Housing Starts
NZD - GDT Price Index
CAD - Gov Council Member Kozicki Speaks
NZD - Current Account
JPY - Trade Balance

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86351 0.86235
gbp/usd 1.23912 1.23696
gbp/aud 1.92611 1.92128
gbp/nzd 2.09333 2.08962
usd/jpy 147.892 147.506
eur/usd 1.06964 1.0676
gbp/jpy 183.106 182.721
eur/cnh 7.8009 7.7909
usd/cnh 7.30769 7.28444
Equities and Commodities
Nasdaq 100 15240.7
DOW 34651.3
S&P 500 4460.28
WTI 92.52
GOLD 1931.88

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.