With Super Thursday upon us, considerable volatility lies ahead for Sterling, and for that matter global, currency markets. At midday today, the minutes from the meeting of the Bank of England’s monetary policy committee will be released. Only thirty minutes later, Dr Mark Carney, the Bank’s governor, will hold a press conference. Expectations for a 25 basis point interest rate hike peaked a couple of weeks ago, with markets pricing a 90% probability for a rate hike today. However, at the time of writing, the implied probability stands at little more than 15%. Still, considerable downside and upside remains within the Pound and will be released dependent upon the decision itself, and the committee’s approach to future monetary policy. The threat of consolidation of a populist coalition in Italy in weighing on the Euro moderately as it trades down by 0.03% on a trade weighted basis at the time of writing. The strong appreciation of the Dollar over the past two weeks, in addition to Trump’s decision on Iran’s nuclear arrangement, has weighed heavily on the Rand and emerging markets in general. The Rand has regained some strength this morning as the Dollar has sold off considerably.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – From minutes to CPI
Charles Porter
Thu 10 Oct 2024
From minutes to CPI If you are finding it harder than usual to digest the current financial climate then you are forgiven entirely. Almost intraday, sentiment is flipping between adjectives such as inflationary, deflationary, stagflationary, expansionary and contractionary to describe the same economic phenomena. That is largely being driven by a rapidly changing macro environment […]
Daily Brief – Overrated Rates
Charles Porter
Tue 1 Oct 2024
Overrated Rates The unwinding of USD implied short term interest rates shouldn’t be underestimated. Take a brief look at changes in FX swap pricing over the past few months and you’ll see just how significant those interest rate expectations have proved to be. Particularly within GBPUSD, the difference is enormous. Post-pandemic inflationary pressures affected the […]
Daily Brief – Nonstop flight to nowhere
Charles Porter
Tue 8 Oct 2024
Nonstop flight to nowhere And before you start wondering, no, this brief isn’t about some new route Qantas has launched to propel passengers an inconceivably long distance in one hit. What I refer to in the title of this briefing are the rapidly evolving growth and economic base case projections within the US. The debate […]
