Speakers
Many FX crosses observed volatility yesterday based upon the words of decision makers at scheduled speeches. Words from policy makers at the Bank of England and the European Central Bank in particular caused significant shifts in spot prices and liquidity conditions within major pairs including EURGBP, GBPUSD and EURUSD. Whilst the words offered to the market regarding the expected path of respective central bank policies brought spikes and gaps in prices, they were short lived, failing to deliver these currency pairs to new ranges. As we approach key decisions from the ECB, Fed and BoE over the next couple of weeks, yesterday serves as a reminder of the surprises that can be delivered by even peripheral members of rate setting committees as well as the data-driven trading we have become accustomed to.
Governor Bailey’s was that Sterling moving voice yesterday. His comments at a scheduled late afternoon speech left markets with the flavour that the Bank of England already was or had almost finished with its hiking cycle. With two rate hikes still priced into the UK’s curve, the tone of Bailey’s speech was sufficient to threaten this pricing. It was unsurprising to see a test of the 1.25 level in GBPUSD yesterday given this pricing adjustment within fixed income. With cable on the back foot, there is limited technical resistance below the psychological 1.25 level meaning a sustained break of this level, as we are currently seeing in this morning’s trade, could incite a weaker GBP.
Unfortunately for the US Dollar, many rate setting members are due to speak later today. The release of the ‘beige book’ last night which publishes the Federal Reserve’s latest survey of regional business contacts showed a relatively downbeat assessment on the US economy. Following the ISM data a few hours earlier, that is perhaps not surprising. The publication was read as good news for inflation but potentially troublesome to still-sanguine growth outlooks. No fewer than four Fed policy makers are scheduled to speak today so traders will beware sudden headline-driven price swings.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Chancellor Reeves
Humphrey Percy
Wed 5 Nov 2025
Chancellor Reeves Market observers were no better informed at the end of the Rachel Reeves speech than they were at the outset yesterday morning. The only surprise was that having comprehensively floated options in the past two months for inclusion in her November 26 Autumn Statement, that the Chancellor should have elected to speak at […]
Daily Brief – Venezuela
Humphrey Percy
Wed 7 Jan 2026
Venezuela For the citizens of Venezuela, the last year has been a tale of ever-increasing economic hardship. Despite deposed President Maduro’s claim that growth has been at 9%, the counter to that is that inflation is estimated at 500%. Exactly a year ago it would have cost 52 Bolivars to buy USD 1. That same purchase […]
Daily Brief – Bulgaria
Humphrey Percy
Mon 5 Jan 2026
Bulgaria On Thursday last week Bulgaria formally adopted the Euro and for 6 months both EUR and the Lev will be legal tender in Bulgaria. In practice, Bulgaria already moved to the EUR in January 2025 when last week’s adoption was approved. Bulgaria, a country with 6.8 million people, is one of the EU’s poorest […]
