Marketwatch EU & UK

Daily Insights
July 28, 2023

The Yen won as the Bank of Japan announced its policy decision and stated it will aim to control the yield curve and purchase 10-year bonds at 1% every business day. USD/JPY falls to trade around the 139 level, after jumping to almost 142 on the decision. Both EUR/USD and GBP/USD resumed their decline today following strong US growth data released yesterday that led both pairs to drop to 1.0994 and 1.2826, respectively. EUR/USD is currently trading at 1.0970 and GBP/USD trades just below the 1.28 level.

The ECB hiked interest rates yesterday in line with expectations, delivering a 25-basis points hike, bringing the deposit rate to 3.75% from the previous 3.50%. ECB’s President Christine Lagarde confronted how tighter credit conditions in Europe are driving the euro-zone economy to the ground, creating a challenge for the central bank on whether to repeat a similar hike in September. As Lagarde gave a downbeat assessment of the “deteriorated” economic outlook and stated that the Governing Council is open minded on another potential rate hike, markets don’t seem as convinced as before for the next meeting.

Unlike the Fed’s view that the US might “dodge” an economic downturn, ECB officials are showing a more worried tone as they understand what the current monetary policy campaign is doing to the economy and how it is affecting growth. At this point, measuring the growth impact is becoming key as the central bank evaluates how much more tightening is needed to bring inflation lower.

Economic Calendar

USD - Revised UoM Consumer Sentiment
JPY - Monetary Policy Statement
JPY - BOJ Outlook Report
EUR- Spanish Flash CPI yy
EUR - German Prelim CPI m/m
JPY - BOJ Press Conference
USD - Employment Cost Index q/q
USD - Core PCE Price Index m/m
CAD - GDP m/m

Market Indicators

Currency Pairs
Pair High Low
gbp/usd 0.7835 0.77582
eur/usd 1.10474 1.09435
eur/gbp 0.85894 0.85497
eur/cnh 7.90057 7.83466
usd/cnh 7.1777 7.14776
gbp/aud 1.93256 1.90577
gbp/nzd 2.09197 2.06705
usd/jpy 141.074 138.057
gbp/jpy 180.838 176.3
Equities and Commodities
DOW 35516.8
SP500 4586.9
UK Oil 84.17
WTI 79.78
GOLD 1959.84
Nasdaq 100 15760.6
S&P 500 4586.9

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


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.